The jokes emerging on the internet from people stuck in lockdown at home for weeks and soon to be months at a time have been cheesy at worst and classic at best. Take this prediction: “There will be a minor baby boom in nine months, and then one day in 2033 we shall witness the rise of the quaranteens!” Or the more circumspect jibe at the antivaccine stalwarts that says “Once they come out with a coronavirus vaccine, I don’t want to see any anti-vaxxers getting one. Don’t be a hypocrite!”

But laughter is indeed the best medicine in an increasingly grim environment where there seems to be absolutely no scientific nor biblical prediction of when the end will be, whatever “the end” means. Hence the heaviness that many of us are experiencing has actually been likened to grief. Brené Brown is a University of Texas research professor and best-selling author of several books on leadership. She runs a number of podcasts and last month hosted David Kessler who worked with the late Elizabeth Kubler Ross on her seminal psychological analysis of grief which came to be known as the five stages of grief. The Kubler Ross grief model as it came to be known, identifies the five stages as denial, anger, bargaining, depression and then acceptance. During the March 31st podcast with Professor Brown, Kessler spoke about the fact that many of us are actually grappling with grief as we go through the horrors of the covid-19 pandemic even though we may not have experienced the death of a loved one. He goes on to remind listeners that the five stages are not linear and one can experience depression before trying to bargain or experience anger first, followed by denial.

More importantly, he challenges the leaders amongst us to rapidly understand these stages and lead our teams to acceptance and to a sixth stage that he has written a book about which is finding meaning. I was listening to this podcast and high fiving an imaginary colleague as I was taking a much needed pre-curfew walk in my neighborhood. All around me were pedestrians from various walks of life: families wearing expensive masks and, like me, walking for exercise rather than walking from work and laborers coming back from a hard day of work with worry lines etched behind makeshift masks strewn together from bits of cloth hurriedly found amongst old clothes. I high fived my imaginary walking colleague because Kessler’s point about the non-linear path in the grief model was exactly what I had been enduring over the last three weeks. I have tended to swing between depression about potential business losses, followed by denial that this cannot be happening to us, right now at this time, acceptance that it is what it is and I need to man up and lead my team to hitherto unknown frontiers, followed by depression. The I rinse and repeat this manic mental gymnastics process every day. It’s exhausting!

But Kessler’s challenge was to find meaning in all this chaos, and help our teams innovate, respond to a dizzyingly frenetic change of pace and build our businesses to survive this. This takes an inordinate amount of will power to set aside our own primal fears and wake up to the current reality. More importantly, it requires us to recognize that our own employees are also in varying stages of the grief curve, so trying to stand up and wave pompoms at the fantastic opportunities that are emerging may be pointless if we don’t first understand that not everyone is on the finding meaning hymn sheet that we are singing from. I recently spoke to someone whose employer had just instituted deep salary cuts for all employees as their revenue sources have been greatly impacted by the government lockdown of certain sectors. She was appalled that some senior managers were still in denial that the salary cuts had been instituted and were getting angry at the numerous requests from the human resources department to consent to the cuts as is required by law and sign the acceptance letters. “How can someone who is leading a team of a hundred people be called a manager if they are not helping their own team deal with the new reality?” she mused.

We all deal with grief differently and there’s no time like the present to witness the inherent strengths and weaknesses within our teams. However as leaders of teams, our jobs do not accord us the luxury of wading slowly through our feelings. Finding meaning is a critical leadership muscle that we must develop, because this too shall pass and we must be prepared to keep our businesses running at all costs. Or we will collapse into a heap of business extermination.

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Twitter: @carolmusyoka

Many years ago as a masters student in upstate New York, I hired a car to visit some friends in Syracuse which was about 100 kilometres north of my college town. It was still winter and the roads were slick with precipitation and ice, so it was a slow drive back late in the night after a lovely afternoon of social engagement. Alone in the rental car, I pumped the music high to keep me stimulated on the lonely drive. Halfway through the ninety minute journey, my headlights flashed on something small, furry and dark that crossed the road right in front of my car quickly followed by a resounding thump as I ran over the nocturnal animal. Remember it was late at night in wintry conditions so I wasn’t trying to stop and figure out what part of nature I had just terminated. But that animal ensured it left a post humous enduring legacy for the rest of my trip. Within seconds of the collision, the whole car was infiltrated by a noxious odour that filled my nostrils, coating the inside of my mouth all the way to the back of my throat which subsequently began to sting as my burning eyes simultaneously began to water.

Without being told, I instinctively knew I had hit a skunk, a cat sized mammal that is native to north and south America. When in danger, it emits a spray from its anus which is a mixture of sulfur containing chemicals that are so offensive that even grizzly bears run away. I had to open all four windows of the car and brave the freezing temperatures, as I imagined myself to be dying from a yet to be determined cause by those who would find my body in a mangled wreck somewhere on the highway. I eventually arrived safely back at my college residence, my hands clamped frozen on the steering wheel, nauseated, weak and praying for the stinking soul of the offending skunk to never smell in peace.

Fast forward to about seven years later and I was back in Nairobi driving to see some friends on a beautiful, sunny Saturday afternoon. I slowed down at the Kenyatta Avenue-Uhuru Highway roundabout to let the cars on the highway pass. My window was down as it was very warm inside the car, when I heard someone just outside my car say “Aunty leta pesa” (bring some money). A street kid in an oversize jacket stood right by my window holding a concealed fecal weapon in the right hand sleeve which I could smell from the constrained confines of my vehicle. I quickly hit the automatic window button, while trying not to accelerate into the highway with oncoming vehicles. The street kid’s reflexes were good as he tried to push the contents of his hand into a rapidly shrinking space, but not as fast as the window closed. Unfortunately the cuffs of the jacket ended up being trapped inside my car and the street kid had to miraculously slip off the garment since I was still gradually stepping on the accelerator. Long story short, me and the offending piece of cloth fishtailed onto the highway, escaping to a very short lived freedom as the fetid fumes of his fecal weapon, which still remained in the sleeve proudly fluttering outside the car, began to consume the whole vehicle. Safely on the highway, I opened the window to let the jacket fall, gagging and almost choking on my own vomit as I rushed to my destination. On arrival, my friend’s extremely gracious husband took one pitiful look at me as I stumbled out of my car and offered to take it to a car wash to be hosed down of all the nauseating memories. He continues to receive my prayer for blessings abundantly.

Both these situations have made me extremely aware of one fundamental human right: the freedom to breath. As we navigate our new normal, unwittingly trapped in our residences and gasping for any external social interaction that may not endanger our lives, we are also being forced to take stock of our freedoms of which there are quite a few. Freedom to deeply innovate our businesses and deliver our products and services differently. Freedom to immerse ourselves in the virtual academic space and learn something new since many academic institutions are now offering free virtual learning programs. Freedom to innovate on how to deliver food and water to those living on less than a dollar a day, whose lives are about to become very hard and are therefore socially vulnerable. This is not the time to be trapped in a freezing, pungent hellhole of skunk sized despair. Not when you have the financial capacity to read this from your virtual comfort.

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Twitter: @carolmusyoka

The campaign slogan run by Sprite a few years ago always holds true to me in life: “Image is nothing, thirst is everything, obey your thirst!” In political and business leadership, however, the slogan should be paraphrased thus: “Image is everything, thirst for power even more so: obey your thirst.” Two things will always hold true, in political and business leadership image is everything and power is absolutely everything. I was inspired to this line of thought as I read the spellbinding book titled “A Thousand Hills” by Stephen Kinzer, who writes about Rwanda’s rebirth and the man who dreamed it. The book is a well balanced historical analysis of President Paul Kagame’s life before, during and after the genocide that shot his leadership prowess into the limelight based on the writer’s research and hundreds of hours of interviews with President Kagame and other notable actors in the drama that became notoriously known as 100 days of genocide from April to June 1994. A key player was the Canadian military commander Romèo Dallaire who, in 1993 was appointed as the Commander of the United Nations peacekeeping force in Rwanda that came to be known as UNAMIR. Dallaire’s boss was none other than Kofi Annan, who was the head of the department of peacekeeping operations within the United Nations. Kinzer writes of Dallaire: “Friends had warned him…. that Annan and his colleagues were ‘incompetent boobs who kept bankers’ hours and disappeared when situations in the field came to a head’ “. Within the course of a year, Dallaire came to understand why Kofi Annan’s image was so tainted. At the height of the genocide, ten Belgian peacekeepers were killed and Dallaire immediately called Kofi Annan with a view to request for a bigger and better armed contingent which had a tougher mandate to intervene and provide security to the victims of the bloodthirsty killers. Annan’s response was simply no. Dallaire was asked not to take sides and told further that it was up to the Rwandans to sort things out for themselves.
Image is really a two-way mirror. One the one side of the mirror is the Kenyan. If you ask the average Kenyan who Kofi Annan is, she will tell you that he is the man who came to rescue Kenya from the brink of civil war after the December 2007 elections. The stylish, salt-and-pepper haired Ghanaian who would brook no nonsense until the two Principals came to an agreement. On the other side of the mirror is the Rwandan. Kofi Annan is the man who failed to let the UN peacekeeping force in Rwanda convert its mandate from a paper pushing bureaucracy to saving lives of victims of genocide. It is arguable that the two sides of this Ghanaian coin are a reflection of lessons learnt, a commitment that never again would he watch while a country went to flames. Brokering – or being seen to broker – peace talks in a country that has significant regional importance for the United States and the United Kingdom provided a great opportunity to redeem a fairly tarnished image.
Closer home, the recent appointment of the pioneering, no-nonsense former CEO of Safaricom, Michael Joseph as the chairman of Kenya Airways was met with some fairly robust debate on social media. Social media is the platform where the uninformed as well as the informed continuously churn out both facts and opinion in equal measure and it takes a discerning observer a while to white out the noise, the “retweets” and the multiple “shares” in order to curate the truth. To the external observer, Michael Joseph has always cut the image of being tough, being focused and having ‘zero chills’ with regards to public perception of what he says. His track record at Safaricom, taking it from a start-up to being one of the top ten tax generators in an astonishing ten years, placed him in the Kenyan corporate hall of fame as a turnaround CEO. Thus it was with much fervor that many social media commentators erroneously referred to him as the “executive chairman”, and went ahead to explain why he was there to run the troubled organization on behalf of the shareholders.
The term “executive chairman” simply means a chairman who takes an active role in the day-to-day management of the organization, as opposed to a non-executive chairman whose role is confined to leading the board and its activities. The potential for significant clashes between an executive chairman and a CEO is fairly high, as two centers of power are created within an organization thus creating room for exploitation by stakeholders. It also prevents the chairman from providing the critical management oversight role that is required via his leadership of the board. Happily, the global slant of corporate governance to which Kenya subscribes to effectively separates the role of chairman and CEO. This has been further codified in the Capital Markets Authority Code of Corporate Governance for Issuers of Securities 2015 that specifically requires the separation of the two roles.
Joseph’s lasting image is one of a man in charge, running a ship single handedly and both the formal and social media are driving the narrative that he will now lead the organization to the land of milk and honey. However, his role is limited by law, and by Kenya Airways’ own constitutive documents, to leading the board which body provides the strategic direction that the organization should follow. There is a substantive CEO in place who is still responsible for executing that strategic direction provided by the board and on whose desk the buck still stops. Joseph’s legacy will be sealed as a turnaround champion if he leads the board in determining the correct strategy to help the airline shift its course and ensures that the board keeps the Kenya Airways management on a tight and focused leash in its strategic execution mandate.

Tom decided to visit his sister who was living in France. He assumed that most French would speak English but found that many people spoke only their own language and this included the ticket inspector on the train. He punched Tom’s ticket, then chatted cordially for a bit, making several expansive gestures. Tom simply nodded from time to time to show him that he was interested. When he had gone, an American tourist, also on the train, leaned forward and asked if Tom spoke French.
‘No’, Tom admitted.
‘Then that explains”, she said, “why you didn’t bat an eyelid when he told you that you were on the wrong train.”

A few weeks ago, I had the occasion to drive east on Mombasa road, on my way to Kibwezi town. Growing up as a child, the journey to our annual Mombasa vacation was one filled with giddy excitement as my late father put his faithful Peugeot 504 to the speed test. We would drive for stretches without seeing another car or truck noting dry savannah landscapes teeming with baobab and acacia trees for miles straddling both sides of the road. In those days there were very few urban centres on that stretch. From the relatively sleepy truck stop of Salama to the placid, uninspiring settlements of Sultan Hamud, Emali and Makindu one would only get relatively excited at Mtito Andei as it marked the halfway point of the five hour road trip. That was then. Today these are all bustling roadside stops, whose growth has been driven largely in part by the vibrant trucking industry that hauls tons of local and East African cargo from the port of Mombasa into the hinterland.

What used to be a two hour trip to Kibwezi, which lies 200 kilometres east of Nairobi, is now a hair raising four hour journey largely consisting of dodging heavy trucks driven by foul mouthed imbeciles who brazenly lean out of their cab window and tell you to get off the climbing lane. “Hamuoni kwamba hii lorry imebeba mizigo?” was shouted at us at least twice, when the only other option was to move to the lane of oncoming, hurtling trucks whose visibly smoking brakes hissed louder than a rattlesnake on heat. But hope springs eternal in the standard gauge railway (SGR) construction.

The previously sleepy municipality of Emali is now a key construction base for the SGR project. I saw what looked like two different factories being built with large storage silos for sand, ballast and other construction material. Trucks without any visible registration plates crisscrossed the highway, raising red plumes of dust in the distance from where they seemed to be collecting sand to be taken to the factories. White banners with Chinese lettering would be the first sign that one was approaching a construction zone and there were many points between Emali and Kibwezi where the construction team had laid the foundation for the concrete columns that will carry the 21st century iron snake.

So I asked around when I got to my Kibwezi destination about the impact the SGR construction was having, if any on the population. I met an old acquaintance who I had not seen in years, who has now moved permanently to Mtito Andei. He is supplying sand, ballast and one other thing that’s slipped my mind to the construction sites. His move was occasioned by the fact that he needed to be next to the business as the demand was very high. “Mtito has exploded since the SGR started,” he mused. “Land is now going for a million shillings an acre from less than 500,000 a year ago.” What was fuelling this growth I asked? “People who have been paid compensation for their land lost to the SGR are flush with cash, and the Chinese tell us that it will take one and a half hours by rail from Mtito to Nairobi once the passenger train starts running. So now people are seeing how they can commute from there.” He went further to add that a lot of previously idle young men now had found jobs on the construction sites, even from the Kibwezi area, and prosperity was driving a consumptive economy in the area. Were local farmers benefitting, I asked, since the Chinese must eat something at some point? ‘Actually no,’ said my acquaintance, ‘All their food comes from Nairobi as it is specialized things like pork and Chinese vegetables like bok choy.’ Are there any potential pork farmers in Makueni County listening?

I gather there is a whole economic revitalization occurring under our very noses along the SGR’s construction path that was probably last seen at the turn of the 20th Century. A few critical towns like Mtito Andei and Emali are likely to become bustling urban centres upon completion of the railway as the local citizenry seek ways to apply their new labor skills. The opposite is however true for busy truck pit stops like Salama that may have vehicular and human traffic reduce if the true impact of the project is felt. The SGR train, once commissioned, is slated to carry double stacked containers with a haulage capacity of 4,000 tonnes. Let me put that into perspective for Kenyan road users. With an axle load limit of 48 tonnes, one SGR train trip has the capacity to take out 83 trucks from the roads. Just like that. If successful, this project should greatly reduce the truck traffic on the east-west regional artery that traverses through Kenya. Banks that finance trucking companies should be stress testing their transport portfolios by now, with a view to reducing exposures over time. The benefits of infrastructure development are unfolding before our eyes in terms of job opportunities as well as growth of ancillary industries that make up the raw material supply chain for the project. I fervently pray that this project is completed successfully and prove that we’re on the right train to an economic Canaan.

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Twitter: @carolmusyoka

“It is only one who is thoroughly acquainted with the evils of war that can thoroughly understand the profitable way of carrying it on.” Sun Tzu -The Art of War

We have been treated to the theatre of the absurd in the last two weeks with the lead actors being Kenya National Union of Teachers (KNUT) and their seasonal nemesis Kenya Union of Post Primary Education Teachers (KUPPET). They chose to take the government head on and there is no worse enemy to take on than one that has time, energy and resources. Watching the various arms of the government close ranks around the increased remuneration issue was like watching the beautiful execution of a team sport. So I picked some quotes from the classic war treatise The Art of War by Sun Tzu, to try and make sense of the histrionics.

1. Convince your enemy that he will gain very little by attacking you; this will diminish his enthusiasm

As a parent and as a taxpayer, I watched the television-based shenanigans of the striking teachers and their union leaders with part shock, part dismay and a whole lot of disapprobation. Apart from the fact that much of the televised gyrations, rolling about on the tarmac and brandishing of twigs with tightly clenched fists was clearly for the sake of the news hungry reporters, it was sad to imagine that the people doing this are the primary role models and guides for our children. Years ago, I went to Kenya High School where the legendary Mrs Wanjohi was the toughest headmistress known to modern man. A withering gaze from a peeved Mrs. Wanjohi could stop a bull elephant in its tracks let alone a disobedient student or floundering teacher. I can guarantee one thing, you wouldn’t find any teacher under Mrs. Wanjohi’s administration amongst the rabble rousing, sabre rattling teachers with grossly misspelt banners that paraded the streets in mocking defiance of calls to return to work. Our teachers back then set the tone and the values based environment within which we matured from gangly, pimple faced, prepubescent girls into mature young ladies ready to tackle a big, bad world. (Having said that my mathematics teacher tore me into shreds every single day of the four tortuous years that she taught me, almost leading me to believe that I would never amount to anything more than a hair-brained reprobate. It appears she was quite evidently wrong!) From flying spittle accompanied by verbal diarrhea, the union leaders held their heads very high and talked tough at their daily press briefings, always looking from side to side to ensure that there were the requisite nodding heads from the accompanying officials. The press briefing would always end with the ubiquitous “Solidarity Forever” anthem, sang badly out of tune accompanied by swinging arms and pumped chests. Despite all this, the enemy – read government – remained largely unconvinced.

2. He will win whose army is animated by the spirit throughout all its ranks – Sun Tzu

Word soon had it that KNUT and KUPPET were keeping the strike coals burning because they were only interested in raising the amount of union dues collected. It didn’t help when the government put their Kes 9.3 billion offer for allowances on the table and it was rejected with KNUT arguing that it was an increase in basic salaries that was being demanded, not in allowances. You see, union dues can only be deducted from a member’s basic salary not their allowances. Accepting the government’s offer for increased allowances would mean that all that flying spittle was for naught. So the presenters on the Nation FM’s morning show called the chairman of KNUT, Mudzo Nzili to have a “chat” about the strike. You could not have heard a dinosaur dance above the bellowing and spirited defense that Nzili put up, at one point asking the presenters what their interest in KNUT financial matters was. Mr. Nzili, I’ll tell you what the public’s interest is: When you make demands for pay raises that amount to 80% of Kenya’s national budget, we will all sit up and pay attention as we pay the taxes that make up that budget. And what’s your interest? Assuming about 270,000 teachers in Kenya where the lowest earns Kes 16,692 and the highest Kes 144,928, I’m going to work with an average salary of Kes 35,910 which is the middle range salary. If I multiply that average salary by 270,000 I get a figure of Kes 9.695 billion. As union dues are 2% of basic salary, we are talking about Kes 193.9 million possibly being collected by unions every month or Kes 2.3 bn per annum. And I am really lowballing my averages here. When pressed about where these dues were going Mr. Nzili became colorful in his language. In between barely suppressed expletives I heard a vague mention of training for teachers, staff salaries for 60 odd KNUT employees and an annual delegates conference. The public sympathy tide started to shift away from what were starting to become horrific money demands and the ranks began to unravel. But the ruling by the industrial court last Wednesday provided the exit that was required for the unions to save face. As Sun Tzu aptly said: build your opponent a golden bridge to retreat across.

But what we watched last week was actually a situation of our own making. We natives have sat back and watched MPs increase their own salaries and kept quiet. We have watched MCAs trundle around the world, flushing our money down the toilet and we have kept quiet. We have watched Goldenberg, Anglo Leasing, Maizegate, Chickengate and who knows how many other unopened gates yet we have kept quiet. How do we expect teachers to sit back and keep quiet when it’s their turn to fight? It’s a race to the “our share of the taxpayer cake” bottom, and we are hurtling at a deathly speed. Ask the Greeks, they’ve been here before.

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Twitter: @carolmusyoka

I recently attended a personal development course and my one key takeaway from the course was this: There is what happened and then there is the story one creates around what happened. I will illustrate by example. Your boss walks into the office and finds you standing at the photocopy machine talking to 3 colleagues. He glances at you briefly and keeps on walking to his office. That is what happened. When you narrate the story to your spouse that evening you say that your boss walked into the office that morning, found you at the photocopying machine talking and made a mental note to himself that you do nothing better with your time than stand around the office gossiping with your colleagues. That is a story you have created.

This was an a-ha moment for me as I started to see very many stories that I had woven in my day-to-day floundering across the tortuous path that is life. A story is your creation. It is your interpretation of an event that has occurred and may be completely different from someone else who witnessed or participated in the same event. The key is to be able to differentiate what your perception is from what is simple fact and to appreciate that your past experiences may help to create a biased lens through which you define events around you. Enough said. I’m happy to report that I can now see very many stories that need to be unwound or completely deleted from my inventive misinterpretation of events.

Story 1:
A man walks into Jomo Kenyatta International Airport some days ago and manages to bluster his way past the ticketing agent and onto an aeroplane without properly identifying himself. The flight is unable to depart as there has been a serious security breach. That is what happened. However, as I saw it, a conceited, supercilious, bumptious and highfalutin legislator fervently subscribes to the former and highly disgraced deputy chief justice’s school of thought of “You should know people”. He then forced an entire planeload of innocent and law-abiding passengers to deplane in order for him to be ejected from the flight with dignity. That is a story I have created. I apologize profusely to the man who does not know that I even exist for being presumptuous, drawing condemnatory conclusions and thus being judgmental.

Story 2: I have undertaken multiple projects in the last six months that require different kinds of artisans. As a result the “F” section of my contact list on my phone is full of Fundi Tiles, Fundi Rangi, and every imaginable artisan required where a building repair project is underway. I have probably met over ten fundis multiple times to buy raw materials or receive a quote. Without exception, every single fundi I have met is always on time. Bang on time. In fact, many appear even ten minutes before the appointed hour. And every single one of them does not own a car. They come to the meeting venue using a matatu. That is what has consistently happened. However, as I have slowly come to conclude, many of the meetings I have with people who drive themselves (or are driven) to the venue will typically find me as the first to arrive. The other person or people are very often late. Ten minutes late, fifteen minutes late. Some, God bless them, even thirty minutes late with breathless text messages (no one usually has the temerity to call and say they are running late even though it’s cheaper to call and make that 10 second wheezing statement than to text). The story I have now woven in my tardiness hating brain is that their time is more important than mine. That the fact that they drive a car has elevated them to a level of such self-importance that arriving on time is deemed to be a sign of desperation, hunger even. The story I have woven is that punctuality is conversely related to ownership of wheels. That fundis, in their unflinching desire to put food on their own tables, value the concept of time and presenting themselves as if they value their customer’s time more than their own. That’s a story I have created. I therefore apologize to all the friends and colleagues who have kept me waiting for them with no apologies preceding their dilatory habits. Your time is more important than mine.

Story 3: A few weeks ago, a mobile telephone company that has the biggest money transfer service together with a commercial bank that has the fastest growing and largest customer base were both summoned before a parliamentary committee. That’s what happened. However, every large corporate institution that does business in this country and others that might have been thinking about doing business in this country felt a collective shudder of horror. A country as developed as Kenya, with strong regulatory institutions and a functioning judicial system, now has a legislature that is so morally bankrupt as to poke its unwanted nose in matters that do not concern it under the mistaken notion of representing “the people’s” interests. The story I have created for myself is that the parliamentary committee in question has the capacity to singlehandedly change the business landscape in Kenya and make us a very unattractive destination for both local and international capital. I apologize profusely for purporting to think that such parliamentary committees are made up of individuals bored out of their skulls with nothing better to do than to harvest where they have not sown and opine on matters that are far beyond any comprehensive capability that they could collectively muster. I have created a story based on my very biased view of those honorable members of parliament whose unquestionable contribution to Kenya’s economic wellbeing and growth has undoubtedly been the best in Africa. For that I am truly sorry.

Here’s to a life filled with acceptance of facts rather than fictions of my fertile imagination.

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Twitter: @carolmusyoka

The French have a wonderful saying that goes something like “Plus ça change, plus c’est la meme chose.” You may have figured it out by now if your high school French has been dusted off the long forgotten brain shelves. On May 27th last year, I published, in this very column, a 1000 word soliloquy addressed to Inspector General Kimaiyo and Chief Justice Mutunga. Knowing full well that not a day passes without someone bestowing a curse or a blessing on either of the gentlemen, I did not expect a response from them. Keeping in true form, they didn’t disappoint. I started off by narrating a less than exemplary experience that I endured as a guest of the state at Makadara law court cells. I then finished off by making a suggestion, as a good citizen should, that perhaps the court’s time could be far better used attending to drunk and disorderly louts, witchcraft cases and matters more grave such as robbery and murder rather than wasting time over minor traffic offences where the victim is simply a Kenyan who doesn’t want to pay a bribe. That was before the 50 kilometre per hour speed enforcement Christmas-comes-early gift that was awarded to Kenyan traffic police. The more things change, the more they stay the same as the French have aptly taught us.

On Friday, September 26th 2014, a very close relative of mine was driving down Waiyaki Way struggling with a numbed right foot that was engorged with sluggish blood from trying to maintain a 50 km/h speed on a sloping highway with trucks whizzing past at breakneck speeds. She was pulled over just before Brookside Drive and accused of doing the Lewis Hamilton Formula One record-breaking speed of 62 km/h in a 50 km/h zone. There were several drivers who had also been pulled over for speeding and who formed a forlorn line on the side awaiting to be told of their fate at the ad hoc “Huduma Centre” that had been installed by the Kenya Traffic Police. She was quite surprised to find that a car that had overtaken her about a kilometer before, doing at least 100 km/h was not amongst the cars pulled over, and promptly asked the policemen why that was the case. “Ah, dada pole sana, hiyo ni bahati yako mbaya.” So law enforcement clearly operates on the basis of good and bad luck rather than uniform application, right? The policemen, to their credit, were polite and professional and even pointed out an mpesa agent who could give traffic offenders the cash bail (Kshs 10,000) that was required to get a temporary freedom to the following Monday, where the cases would be heard at Kibera law courts.

A quiet word on the side was however whispered to the effect that the problem could vanish faster than sugar dissolves in tea if the right kind of impetus was provided. Well, Close Relative was having none of that and appeared for her court case promptly at 8 a.m. last Monday. And there, the illusion that is Mutunga’s “I have a dream” vision promptly dissolved. Being from good breeding, Close Relative arrived at 7:45 a.m. The court doors did not open until 9:05 a.m. and the magistrate promptly began his business at 10:20 a.m. As he was gliding on efficiency roller skates that morning, he opted to start with the day’s cases first, to rid the court of the lawyers and witnesses who had by this time filled the court causing it to almost burst at its cement seams. Following this were the mentions for the “mahabusus” who didn’t have the benefit of being out on bail. The traffic cases were dealt with at around 1 p.m. and Close Relative was literally swaying on her feet to stay alert for her name to be called out. Only two people were called out with traffic offenses from Waiyaki Way that day, which led Close Relative to safely assume that the other long line of traffic offenders that she found at the “Brookside Drive Huduma Centre” on the Friday of the offense, had miraculously had their cases vanish…like the sugar in the tea thing I spoke about. Long story short, she was charged Kshs 20,000 and thrown promptly inside the Kibera law courts cells as her friend on the outside worked out the system to pay her fine for her release. (Kenyans please note: NEVER go alone for a traffic court date. You need someone to pay your fine for you as you stew in sheer terror behind bars with the general prison population back there)

My conclusions: 1. Once the system chews you up and spits a terrified you out, it is geared to ensure that the next time you are caught you will do everything in your power (including having a big fight with your conscience) to ensure you never go back there again. Read into that what you will. 2. Every single time a government functionary wakes up and declares a deeply buried law will now be enforced, the Kenyan police dance a jig and break out the champagne. Exhumed laws make trawling the Kenyan streets looking for victims all that more interesting and only widens the scope for “shaking down” new prey.
The solution is simple: Allow someone to pay their fine on the spot once they are caught with a traffic offense that has the option of a fine. It would reduce the workload of the hard working magistrates, increase revenue collection at the roadside Huduma Centres and release Kenyans to go and undertake economic activities that will maintain our status as a middle-income country. Oh, but I forget, that would be too efficient wouldn’t it? Dear Kimaiyo and Mutunga, as you ignore me a second time my prayer for you is that you NEVER have to be a guest of the state, albeit temporarily. It would make your chocolate colored skin yearn to crawl back to its lofty perch.

Postscript: If you would like to join the petition to the Chief Justice to allow for on the spot payment of fines please like the Facebook page “Petition For Direct Payment of Traffic Fines.”

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Twitter: @carolmusyoka

“Last time we had spin doctors desperately igniting applause for a flailing leader was at the Tory conference days before Iain Duncan Smith was dumped. Oh dear. It is a measure of how pea-soupy, how hum-drum and adolescent Ed Miliband’s speech was yesterday that three of his claque stood at the side of the hall and tried to get the crowd clapping…Within five minutes it was apparent the speech was fast going phutt. Mr. Miliband, having again opted for a memorized performance, was uncertain of his words. Gaps appeared between sentences. The rhetorical energy was so faint, it could have done with a snort of smelling salts.”
Quentin Letts, Daily Mail on September 24, 2014.

Last week I was in London and my trip coincided with the annual Labor Party conference in Manchester on Tuesday 23rd September, where the Labor Party leader, Ed Miliband, made a less than spectacular memorized speech that was ripped to shreds by mainstream media. Firstly, I have to get this off my chest: there were no attacks on the “tribe” of the media commentators. Political leaders are not immune to the invariable scathing criticism from the media without their sycophantic followers necessarily “catching feelings” to use Kenyan parlance. Phew, that was a relief. Now to my observations: the hard working and tax paying resident of the United Kingdom pays a lot of attention to the seemingly nonsensical rhetoric of the political class. Why? This is because the ruling party will have an enormous impact on the quality of life of the average resident simply because tax revenue is a big driver of the government’s budget and different political parties have varying views on which sections of the economy to tax and which economic policies to enforce.

A good example comes out of Ed Miliband’s speech on the direction he expects his government to take in the event of his win in the 2015 general election. Quoting James Chapman in the Daily Mail: “The Labor leader said that if elected he would seek to fashion an interventionist state based on something he called ‘the principle of together’. He said he would tax tobacco companies, owners of valuable properties and hedge funds to raise £2.5 billion (Kshs 342 billion) to pay for 20,000 more nurses, 8,000 more GPs (doctors), 5,000 more care workers and 3,000 midwives. A ‘mansion tax’ would be introduced on more than 100,000 homes worth more than £2million (Kshs 290 million). Developers will no longer be allowed to ‘sit on land’, which will be released for house building and ‘cruel and vindictive’ cuts to housing benefits will be reversed.” Miliband is purported to have used the word ‘together’ 47 times.

As I sat with some old friends having some spiritual nourishment of the liquid kind at a pub in Leicester square last week, a beggar of Caucasian extraction stopped at our table (we were seated on the pavement) and asked us for some coins. I reached into my purse and removed a few coins that I had much to my friend Patricia’s disgust. ‘Don’t give him anything, he is entitled to council housing and food which are financed by my taxes,’ she said. Patricia, who works for one of the big four audit firms was rightfully pained. She pays 40% of her salary in taxes, which are partly used in the welfare system that the United Kingdom provides for its citizens. By the end of the evening, a total of nine beggars had passed by our table, each with a more soppy story than the last, but by which time I had become inured to the pathetic, dirty faces after Patricia had walked me through the fairly generous welfare system that has led to generations of families living on the “dole” which celebrates indolent lifestyles. With annual welfare payments of up to £60,000 per year (Kshs 8.7 million per annum or Kshs 725,000 per month) some of these folks live in council flats in central London where apartments in neighboring buildings are charging £1,500 per month in rent. Some of the “cruel and vindictive housing cuts” that Miliband is referring to happened when the government realized that the welfare recipients living in apartments in central London enjoyed a lavish lifestyle financed by the state. The cuts therefore introduced a “market rate” where the council housing rent was given a market value and deducted from the total benefits received by the recipient. The aim then was to push the residents out of central London to a place more affordable where they could use less of their welfare money on housing. Eventually, the council housing should be converted into real estate that is generating true market value returns.

The trick that many of the welfare recipients have cottoned on to is to have many children, as one’s benefits are increased consequent to the number of dependents one has. For a true capitalist like me, it is nothing short of abhorrent that there would be someone waiting for me to work my backside off every day and pay my taxes so that they could live off of my sweat. But I digress. One key point that 3rd world countries should note in Miliband’s speech is the need for more health care workers. Over 60% of the National Health Service is now staffed by nursing immigrants from Malawi, Kenya, Uganda, Phillipines and India to name a few countries. It has caused a significant drain on the medical resources of some of these countries and is a cause for worry as local governments cannot compete with the salary scales offered in the United Kingdom nor the promise of residency and potential citizenship after a few years of good service.

So we are all in Miliband’s bus ‘together’. The good news is that polls show Miliband’s approval rating is at minus 23 per cent 12 months ahead of an election. Perhaps there is hope for all mansion owners, tobacco companies and owners of undeveloped land then!

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Twitter: @carolmusyoka

A friend of mine recently sent me a brilliantly written article by Forbes columnist Liz Ryan titled ‘Smart answers to stupid interview questions’. The writer takes pot shots at the inanity of the job interview process, particularly around the buffet selection of ‘stupid questions’ that have taken pride of place at every interview table. She summarizes them into three classically stupid questions: (1) What is your greatest weakness? (2) With all the talented candidates why should we hire you? and (3) Where do you see yourself in five years? You have to read the article yourself to find out what she really thinks should be the true answer to those questions. However, I smiled as I read the piece as she may as well have been talking about an interview in the cool climes of an Uppherhill office as she was talking about one on Wall Street.

Firstly, having sat in on countless interviews from the most junior entry level employees to potential CEOs I can say with utmost certainty that the most favorite answer to the first question about what is your greatest weakness is“Impatience”. Invariably, the successful candidate who said “impatience” during her interview cannot answer your email in a week let alone a day. She is impatient with slow people around her but never turns the lens on herself when output is required to be delivered within reasonable time frames. She is impatient when work is not delivered to her on time by subordinates and often does the job herself because she believes in the mantra that “if you want a good job done, you have to do it yourself.” Be very careful of the candidate that answers impatience as a weakness. It’s a much easier and less wicked vice to admit to having than other vices like “I love backstabbing my colleagues by talking smack about them to the boss at any given opportunity.” Or the team building classic: “I love hearing good ideas and taking credit for them when the boss asks whose idea it was.” I’d love to see the candidate who admits: “I hate taking orders from anyone and that’s generally a weakness I struggle with, but I am seeing a counselor about it. Does the company medical policy cover psychological counseling by the way?” Folks: no one is ever going to admit their greatest weakness to you unless you are either (a) their priest or (b) their soon-to-be-ex-lover.

The second question relating to why should the company hire you over and above the other candidates provides a moral and cultural quandary to many candidates. You are asking the candidate to brag and to show up the other candidates making them pale in comparison to yourself. In many cultures, bragging about your achievements at the expense of making your peers look inconsequential is frowned upon and viewed as conduct unbecoming. Your resumé should speak for itself and, failing that, the interviewers should use their powers of comprehension and deduction to arrive at which of the candidates is the best amongst those before them (which they actually do end up doing anyway!). However, one can also argue that this question gives the candidate the opportunity to sell himself, demonstrating self-belief and confidence that are basic requirements and the staple for every single job description in this world, right? Wrong! This is not the annual Baringo goat auction. The candidates do not need to say why they are great for the interview panelists to determine if they are suitable for the job. Furthermore, the candidate doesn’t even know who the other candidates are anyway, otherwise it would end up being a slugfest: “If you guys are thinking of hiring that Susan lady who walked out of here, you must be totally nuts. She couldn’t organize a party in a brewery even if the instructions were stapled to her forehead.” Therefore how then will the candidate be able to give an honest answer as to whether they are the best candidate for the job when, chances are, there is another candidate who they know is undoubtedly better than them. This question, if anything, is asking the candidate to lie. Just like question one about greatest weaknesses.

The final “stupid” question asks: “Where do you see yourself in five years?” Look, I get it. We want to see if the candidate has (a) ambition to grow herself and (b) a medium to long-term outlook on her chances of sticking with the organization. Once again, we are asking our candidates to lie. Truth be told, no one knows where they will be in five years, let alone tomorrow. We wake up every morning thankful to our chosen deities for giving us the chance to live another day. We pray (for the spiritually inclined) and hope (for the non-spiritually inclined) that we will be alive in five years. Then we pray or hope that we will be financially freed from the shackles of this very employment we are groveling for so that we can follow our true passion be it sailing, growing exotic bonsai trees or painting serene landscapes. Because, as you all very well know, we work so that we can live, and if we didn’t have to live, we wouldn’t have to work. There are of course one or two frenzied exceptions who live to work, but obviously those are the ones following their true passion and who don’t see what they do as work. They are few and far between and a complete fresh of breath air to be around. Their joie de vivre is heady and intoxicating making us wish that we too could be doing what we truly love doing which is likely not in someone else’s organization. How many good candidates have we lost because they didn’t want to lie about their weaknesses, their perceived talents or their location in the future? One thing’s for sure: a 30-minute interview is the worst beauty contest ever.

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Twitter @carolmusyoka

I’m not an economist. But I do know one thing: you cannot remove blood from a stone. Once upon a time there lived a King who ruled over a large kingdom and efficiently taxed his subjects. Every six months, each household had to give a pregnant goat to the village administrator. Once the goat had given birth, the administrator would keep one of the kids as his reward and pass the mother goat and the remaining kids to the King. But some of the village administrators started getting unhappy with their rewards. “Why can’t we keep all the kids and pass the mother goat to the King?” they asked. The King heard about the murmuring amongst some of the administrators and called them to a conference in his palace. “Some of you are unhappy with the reward system of keeping one kid and passing the rest to me. I need all the kids as I use them to feed my soldiers who defend this great kingdom from our enemies. I need the mother goats as I use them to breed with my prize male goats to reproduce even more goats which go into the national coffers. Our kingdom is wealthy and the envy of all the other kingdoms on this continent. If there is a drought, I can feed my people with my goats. Do not try to change the order of things,” he said. But the village administrators, who had now all been convinced of the benefits, stuck to their guns. “The people have sent us here to tell you that we should get two kids each. The people know that we will share the benefits of these kids with them. The people are behind us 100%,” said the self appointed leader of the village administrators. “Alright then,” boomed the King, ”It shall be so. From today henceforth, you shall keep all the kids and send the mother goat to me. But from today henceforth, all households are now required to give me two pregnant goats. Be gone from my presence and good luck explaining to your villagers why your request has ended up doubling their taxes.”

Like I said, I’m no economist. But it doesn’t take an economist to see the end result of this “pesa mashinani” red herring that is being placed before us in the form of a referendum. The wags behind the push claim that the central government should send even more money to the counties for ultimate distribution in development projects. The central government has a finite source of funds, the bulk of which are derived from taxing you, the Kenyan citizen. You are taxed on your salary via pay as you earn, on the goods and services you purchase via value added tax, on the equipment and cars you import via import duty, on the profits you make as you do business via income tax and the list goes on. The government also has an almost infinite use for those revenues: salaries have to be paid, domestic and foreign debt must be repaid, roads, ports and bridges have to be built…you’re getting my drift. If more funds are sent to the counties, the central government’s expenditure will not necessarily reduce, as the factors driving expenditure remain constant. A 2013 Ministry of Devolution and Planning report titled: A Comprehensive Review of Public Spending states that since 2008, growth in (central) government consumption surpassed growth in private consumption. In 2007, private consumption expanded by 7.3 percent and government consumption by 4.4 per cent. However from 2009 to 2011 the average growth in private consumption was 2 per cent compared with an average growth rate of 4.3 percent for government consumption.

Brothers and sisters of this our beloved country: the central Kenyan government is a behemoth. A voracious behemoth that is now consuming even more than the private sector if its own reports are to be believed. If more money is sent to the counties (who, with the exception of one or two, have quite brazenly demonstrated their inability to absorb their allocations or spend funds on development activities) then the central government will have no choice but to do one thing: tax us more. Yes, more blood must be squeezed from our unyielding stones because the erudite and well-educated politicians have convinced us natives that our best solution is to have more money for them to spend at the county level. And as the table below shows, we rank average in the league table of tax collection as a percentage of GDP globally, but from an African perspective, we are not doing too badly. We fare the best in the East African Community but pale in comparison to Zimbabwe (shock of shocks it is the number one country globally!), Lesotho and Swaziland. The common theme, though, with Lesotho and Swaziland (which can both comfortably fit in Rift Valley County’s pocket) is that they lack natural resources and therefore must extract as much as possible from the taxable populace. Zimbabwe, without donor budgetary support and improbable access to global debts, has to aggressively ensure that the local revenue stones bleed. On the other extreme is the United Arab Emirates that has generated enough income from its oil resources as to reduce the tax burden on its citizens to almost nil. So all you pesa mashinani stalwarts, please get on your collective knees and pray as follows: Dear Deity of choice, please make Kenya’s oil resources start producing instantly and ensure our government manages the forthcoming revenues expeditiously. If you, Deity of choice, do not like this prayer petition and fail to grant it then please make the Kenyan natives’ stones start bleeding. Profusely. Amen.

Country Tax Collected as a Percentage of GDP
Zimbabwe 49.3%
Lesotho 42.9%
Swaziland 39.8%
United Kingdom 39.0%
South Africa 26.9%
United States 26.9%
Kenya 18.4%
Egypt 15.8%
Rwanda 14.1%
Uganda 12.6%
Tanzania 12.0%
Nigeria 6.1%
United Arab Emirates 1.4 %
Source: Index of Economic Freedom, Heritage Foundation

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Twitter: @carolmusyoka

Last Tuesday, my friend Wallace Kantai penned a very interesting column in this newspaper titled “Why Kenya’s real estate scene is a bubble waiting to burst.” I read it online as I like to see reader comments, some of which are interesting, others amusing while others demonstrate that there one or two readers who are suffering from bats in their belfry. Spewing out bile, abuses and hate on a writer of a quotidian subject like real estate is inarguably odd. I should know as I have received death threats in the past when I write my own opinions about Kenya’s real estate. They walk amongst us.

Anyway back to Wallace’s piece. One of the online commentators made a very good point: regional instability drives local housing demand. For as long as there is regional instability in places such as Somalia and South Sudan, there will always be a demand for housing in Kenya from their moneyed elite that does business in those countries but channels the profits elsewhere. Another commentator hit the nail on the head: proceeds from corruption are being channeled to real estate. How very true, after all real estate as an asset class has lowest barriers to entry. All you need is an off-the-briefcase-lawyer’s-shelf-company that has a ton of cash to buy a house. No questions asked and, until very recently, no tax implications such as capital gains tax. Park your corruption proceeds in a block of residential flats, a commercial building or a hotel then sit back and wait for the value of the property to rise.

As long as there is regional instability and deep seated corruption in Kenya, our real estate scene will only go in one direction: up! If you look at housing bubbles in other markets such as the United States and Europe, the primary driver for the rise and subsequent fall in housing prices is one thing only: access to credit. This access to credit is provided on both the demand side (buyers of property) and the supply side (developers of property). In China for example, the property market which has in the past been described as “red hot” has seen a big decline as developers are faced with huge housing stocks, large debt and a slowdown of demand. The result is that developers start to slash the prices of their housing stock as their bankers start to pile pressure for loan repayments. CNBC.com reports that according to a survey by China Real Estate Index System (CREIS), 45 of the 100 cities experienced month-on-month property price declines in April, up from 37 cities in March. The obvious result is that buyers then stay away from the market as they await the prices to flatten out so that their investments don’t start off at a negative from the beginning. Interestingly enough, the Chinese mortgage market requires a significant amount of down payment from potential borrowers, which makes the debt portion of the average Chinese homeowner’s property relatively low. Thus credit does not play a significant role in the take up of housing stock in China, as it did in the USA with the 100% and above financing that was given even to illiterate, non-income earning borrowers in the run up to the 2008 financial crisis. CNBC.com reports that with rental yields as low as 1-2% due to the oversupply of housing stock compared with mortgage rates in the 6-7% range, the motivation to rent a house rather than buy one is, financially, a foregone conclusion.
Let’s look at the rental yield argument for a minute. You buy an apartment in Kilimani for Kshs 15 million, pay 4% stamp duty at Kshs 600,000/- and legal fees at say 2%, which would be Kshs 300,000/-. Your total upfront cost is thus Kshs 15.9 million. You choose to rent it out since you already live in another house and just needed a place to park a loose 16 metre (in Kenyan parlance) since the bank was only giving interest of about 8% p.a. and the bank manager was already asking questions as to how that figure multiplied by ten had just “landed” into your bank account last month. You will probably get about Kshs 75,000 per month in rent, which translates to Kshs 900,000 as your annual rental income. If you divide that by the cost of the house at Kshs 15.9 million, your gross rental yield comes to 5.66%. I say gross, because I haven’t netted off any taxes or maintenance costs that you may be paying on the apartment. Today mortgage rates in Kenya are anywhere between 11% (assuming you are an A+ customer at the bank that’s allegedly giving this rate) and 19% (which is the rate that the ordinary mwananchi is getting). The regular Kenyan can afford to pay 5.66% on the value of a property to a Landlord rather than 19% to a bank. It’s useful to note that the rule of thumb in real estate investing is that you should be at least earning 10% per annum in rental yields. Thus a Kilimani apartment that has a total cost of Kshs 15.9 million should be generating an annual rental income of Kshs 1.5 million per annum or Kshs 125,000 per month. If this is not your yield, then your acquisition, from a real estate investment perspective, is under water. But wait; shouldn’t we factor in the capital appreciation on the apartment? That’s what I would do, and given that the property is appreciating on an annual basis at about 12% or Kshs 1,908,000 then if I add that amount to my annual rental income of Kshs 900,000, I’m getting a return on my property of about 17% p.a. Not bad, but still below what it costs to borrow at 19%. So our property market today is geared towards rewarding the cash buyer and penalizing the mortgage borrower. Question is, are there enough cash buyers in the market? Ask Somalia, South Sudan and Kenya’s tenderpreneurs.

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Twitter: @carolmusyoka

Patriotism is defined as the act of vigorously supporting ones country and is prepared to defend it against enemies or detractors. Quite similarly, loyalty is defined as a strong feeling of support or allegiance. The two actions evoke a lot of emotion and passion particularly about the country, person, organization or item that is the subject matter.

Many years ago, while I was still a minion busting the banking grind, we went to visit the executive team at Airtel’s predecessor, Celtel who had indicated that they wanted to undertake an enormous capex project that required millions of dollars. As we drove to their offices, the key relationship manager asked us to remove our business cards so that he could see them. We obliged him. He took one look at the cards and muttered an expletive under his breath. with raised eyebrows, my senior asked him what the problem was. “You can’t give your cards when we get to the Celtel offices,” he answered. “The Celtel executives are very sensitive about working with people who use their services and all your cards show Safaricom numbers.” With raised eyebrows, we swallowed the snide retorts that were on the tip of our tongues and feigned having forgotten our business cards in the office when the meeting introductions took place at Celtel.

I have also been reliably informed that if you are going to do business in Kigali with the government of Rwanda, don’t try and rock up on the first Kenya Airways morning flight, bright eyed and bushy tailed, ready for business. They don’t appreciate that. If you want to do business with them, then fly RwandAir and pay the “loyalty tax” that is levied on suppliers by many businesses worldwide. The evidence may be anecdotal but is very true. Business loyalty demands business loyalty

I write this because I have a veritable bee in my bonnet. Landing at JKIA at about 9:30 p.m. a few days ago, I found the usual, absolute total chaos at the immigration hall after passing through a makeshift Ebola processing barrier where a tiny plastic pen was appended to my forehead and I was given a clean bill of health. Now, frequent travellers will know that the worst times to land at JKIA are between 5:30 and 7:30 in the morning and between 8 and 10 at night as this is when several Kenya Airways flights as well as other international airlines are landing. Our immigration department has attempted (please note the deliberate use of the word attempted) to reward Kenyans with their citizenship by creating about four dedicated counters for passport processing. East African Community and Comesa get about two more counters and then the rest of the world get another four counters or so. It is noteworthy that most of the rest-of-the-world citizens are given visas at the counter and thus their processes can take at least 10 minutes. I have travelled widely in the last ten years and nowhere am I made to feel like a gnat in a bottle than in American airports like Chicago, Miami, New York or Heathrow , Johannesburg and Dubai. Why you ask? Because you are NOT allowed to even THINK about standing in the queue that says citizens only (which of course moves faster than every other queue) and you will stand in a snake of a line that would make Moses and his Red Sea crossing look like a kindergarten game. Typical wait times on these airport immigration queues are anything from one and a half to two hours. The common thread in all these airports: you cannot and will not be invited to join the citizens only queue until ALL the citizens have been processed. How do they do this? They employ floorwalkers whose job it is to monitor the counters and ensure that all immigration counters are being utilized effectively, with priority to citizens.

So you can imagine my anger when I landed a few days ago and found at least 30 Americans standing on the “Kenyans Only” queue. The Americans needed visas and therefore tied up the ENTIRE queue of Kenyans waiting behind them as they were being served. When I got to the immigration official an hour later I just let it rip. How in heaven’s name could they allow this to happen? The immigration official shrugged her shoulders and said “Ongea na wakubwa, wao ndio watasema vile tutafanya.” So I should talk to Immigration seniors to ask them to tell their officers at JKIA inbound immigration to respect the very BIG signs above them that clearly state Kenyan citizens only? Nonsense!

I had no words. I still have no words. As a Kenyan I am used to being treated nothing less than an unwelcome cockroach when I visit other countries and watch them glorify their own citizens by giving them an express pass without giving a rat’s toenail about the long lines of hungry, tired passengers that wait their turn to be given a smidgeon of attention. So I expect the same when I come home. I expect that someone will be standing at the front of the queues ensuring that Kenyan citizens get their just rewards for holding those navy blue passports emblazoned with our national coat of arms. I expect that I will sashay past those hungry, tired passengers who have come from countries that will give them royal treatment when they return home.

I am a proud Kenyan. I want others to pay a loyalty tax by standing in queues for hours as they make us do when we go to their country. But no, instead I get my fellow countrymen manning immigration counters and celebrating the foreigners as if they were their paymasters.

Dear next-head-of-the-Department-of-Immigration: Please remember you are Kenyan. Please celebrate your Kenyan-ness at the expense of other visitors. Please enforce the citizens only immigration counters at JKIA and make visitors remember that we, Kenyan Citizens, own this country. Yours truly, a Kenyan patriot.

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Twitter: @carolmusyoka

Once upon a time, there lived a pig. Everyone told the pig how ugly it was. The pig went on a diet and lost ten kilos, but everyone still saw it for what it was: a pig. It hired the sharpest professionals to undertake reams and reams of research and spin scientific sounding data about how it was the best animal alive, but everyone still saw it for what it was: a pig. It finally walked into a shop and bought lipstick, which it promptly smeared on its pouty lips. But everyone could only see what it was: a pig. And so the pig lived unhappily ever after.

I have been writing this weekly opinion piece since March 2009, which would make it slightly over five years of a punishing weekly process of about 5 hours of staring into space wishing for a topic to emerge out of thin air followed by 3-4 hours of pounding furiously at my laptop to produce 1000 sensible words. I refrain from putting my credentials at the end of these opinion pieces simply because I don’t think one or two sentences can cover my (short) lifetime of experiences. But I feel for the sake of some readers, I should explain my background. Before I started writing I was, believe it or not, a real life banker. In the ten or so years that I worked in the industry I played various roles but ended up as an executive director of not one but two banks. In the course of those roles I had direct responsibility over what we called the P&L and the Balance Sheet, meaning that I led teams that grew revenue (and, therefore, profit or loss) from the skillful management of assets and liabilities (on the balance sheet).

Pricing of those assets (or loans in regular-speak) and liabilities (deposits) was determined by myself but with the strong guidance of the Assets and Liabilities Committee or ALCO which committee is a regulatory requirement for any financial institution licensed by the Central Bank of Kenya. One of the core objectives for ALCO in any bank is to set the bank base rate as this is what will guide the pricing of all retail and corporate loans. The ALCO also gives guidance on what pricing on deposits should be based on the current cost of money in the market. I have therefore made pricing decisions on loans and on deposits. I undertook this role with my sleeves rolled up and heels tucked neatly under my table as I made money for my employer. On the corporate side we had bespoke pricing for the multinational and top tier local corporates, which meant that each client had their own unique pricing based on their historical, current and projected financial performance, quality of securities and past borrowing history. On the retail side, perhaps only the high net worth individuals would have differentiated pricing again based on their projected cash flows and quality of securities. The rest of the “watus” were managed in bulk for many reasons, one of them being primarily the cost of assessing past borrowing history, monitoring and differentiating individual credits would be herculean.

Not that it can’t be done, it’s just too much administration in a market that is not used to differentiation on a retail mass-market basis. And thus an unholy alliance formed within the banking sector for the retail mass-market customer segment. If the big Tier 1 banks that were the price-setters were not willing to differentiate on price, then the Tier 2 and Tier 3 banks would happily play in the same space, after all, it was more money for everyone. Furthermore, the large spreads being enjoyed above base rate in the retail mass-market allowed for historical operating inefficiencies to be catered for. However, there are banks that have managed to streamline their operations through automation and centralization but continue to ride the high interest rate gravy train. It’s too good to get off!

Why have I quibbled so much about bank pricing, which I already hemmed and hawed about three weeks ago? This is because my sentiments on the new Kenya Banks Reference Rate (KBRR), which come from actual practice rather than theoretical posturing about macroeconomic gobbledygook, have received some criticism as being the rambling justifications of an armchair analyst. I have warmed many armchairs, I most certainly admit, but they are the armchairs of retirement from active employment in a thriving and exciting banking industry.

So I say it again: John, who has borrowed 7 times in the last ten years and has faithfully repaid all his loans on time should borrow at say KBRR +2% whereas Julius who is a first time borrower should borrow at say KBRR +6% and Mary who has borrowed 5 times but defaulted on at least one of the loans should borrow at say KBRR +8%. The different margins reflect the credit risk for the perceived class of credit rating that each borrower represents and can easily be inputted into a credit scoring model. In theory, the KBRR should reflect, amongst others, the operating, funding, capital and market risk costs. In practice however, not all banks have the same costs in all the named parameters and it is therefore difficult to avoid loading other costs into the lending margin above which banks price their loans.

Banks are like any other enterprise that uses shareholder’s capital to generate profit. They also have every right to set their own pricing for their products and can differentiate and thereby reduce the pricing of loans for individuals if they want. It just needs one brave bank to do that. Just like an insurance customer sees a lowered premium year on year as a “no claims bonus”, the retail mass market customer John, who borrows regularly and repays faithfully, should desire for his cost of borrowing to come down. John is not interested in his bank’s Base Rate versus KBRR. That’s just lipstick on a pig.

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Twitter: @carolmusyoka

Tony (not his real name) picked me up from Strathmore Business School last Friday, for my airport transfer to JKIA. Standing at about 5’5’’ with not more than 60 kgs under his belt, it would be difficult to pick him out in a crowd. Traffic was sluggish that afternoon as we snaked a carbon monoxide filled path down Mombasa road and a conversation naturally filled the void between driver and passenger. “I’m looking for a good driver, do you know any?” Tony asked, piquing my curiosity. I had noticed by this time, that he was not quite the ordinary cab driver. “Why?” I responded with a question of my own. “I’m having great difficulty with these young guys I have, they don’t respect my cars and drive like thugs even when they have a client on board.” I smiled to myself; Tony was referring to the “young guys” as if he were sixty years old. Turns out that Tony has 3 saloon taxis and one van and employed drivers for each vehicle. He is a Strathmore University graduate in hospitality and management. “So how did you end up doing this business then?” I probed. “Actually this was a business plan from a project in second year, and I just put it into play,” he responded. Now I was really curious and what followed was a fascinating conversation that completely restored my faith in the millennial generation.

“But how did you get the capital to start the business? How old are you? Where do you get the cars from?” my questions followed in AK47 staccato gunfire mode with no rationale to the order of questioning. “I’m 22 years old……” I cut him off before he went further, ‘What?!” Tony chuckled mutedly at my disconcertion. “My mother died when I was young, and I was brought up by my older brother. I got a scholarship to Strathmore University but I was always keen to do the “hustle”, so I started designing posters and brochures when I was in school to make extra money as my brother couldn’t finance all my needs.” Ahead of us, a car swerved dangerously into our path and I bit back an expletive at the interruption as Tony deftly maneuvered out of harms way. He continued without missing a beat. He taught himself design programs online and when he had made enough savings, went ahead to purchase an online airline ticketing system for about $500 so that he could offer air-ticketing services to his clients. He linked up with an accredited travel agency that would provide him with the legitimate back end system that would allow tickets to be issued and payments made to the airline. “I signed up for an airline booking course that lasted for about a month, so that I could learn how to work the system.”

Within no time, Tony had a regular list of clients within and outside of the university that gave him business. But he noticed that most of his clients would ask him for airport transfers and he would link them up with the cab drivers around Madaraka who he trusted. He then realized that he could provide horizontal integration for his air ticketing business by providing the airport transfers himself and therefore decided to buy his first taxi based on the business plan he had done in second year. He bought the van when his clients started requiring short-term tours around Kenya. He learnt very quickly that it was cheaper to order second hand cars online and pay using the Japanese agents’ offices in Nairobi. It saves him at least Kshs 200,000 per car. “So have you approached the Youth Fund so that you can expand your business?” I asked. Tony snorted in derision, the first time I saw any sign of disillusionment since we first started conversing. “Those guys are not serious, they want to give me Kshs 50,000 and then say I must be in a group. Group? What’s that? Fifty K , what’s that?” I had heard about the difficulties of getting loans from the Uwezo (Youth) Fund, but had no idea just how unfriendly the loan terms were to enterprising youth that already had existing businesses that needed that critical capital to push them to their optimal tipping point for growth. Tony is a self-proclaimed “hustler”. He has employed three people and has the potential to employ more if his business grows.

He is young, educated and extremely tenacious. Having lost one of his vehicles last year in the Westgate siege building collapse, he was extremely despondent when the insurance company refused to pay saying that it was an act of terrorism for which his comprehensive cover did not provide protection. “But, I was alive, and that was important. I walked out of Westgate alive and saw people die around me. How can I let the loss of a car kill me? That’s what I had to tell myself in order to push on.” But the insurance company eventually reimbursed him when a key competitor placed a full-page ad welcoming claims from clients who had lost property in the siege. Shrugging his shoulders, Tony was quite circumspect, “Competition is good, my insurance paid because of the competition’s advertisement. Can you believe it?”

As today’s CORD rally takes place, attempting to push Kenyans against a virtual wall of political brinkmanship, millenials like Tony continue to forge ahead, pushing their noses to the ground and working hard. Tony has taken hard business knocks, but pulls himself up with pride of place and a refreshing “hustler” mentality. If one in ten Kenyan youth had his attitude, sheer grit and determination to succeed despite of all the nonsensical political sabre rattling that terrorizes our collective Kenyan mettle daily, we will deliver what the Eurobond investors see in us: a service driven, non-resource based economy that manages to separate the political flavor of the day from the engine that drives it: Kenya’s entrepreneurs. Hail to the Hustlers!

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Twitter: @carolmusyoka

The self-centered woman knelt in the confessional. “Bless me, Father, for I have sinned.”
“What is it, child?”
“Father, I have committed the sin of vanity. Twice a day I gaze at myself in the mirror and tell myself that I am the most beautiful woman who ever walked the face of the earth.”
The priest turned, took a good look at the woman and said, “My dear, I have good news. That isn’t a sin – it’s only a mistake.”

Kenyans are extremely vain. We bash each other in political rallies and on social media platforms strumming up the guitar strings of tribal hatred. We dismiss our verbal intellectual engagements with each other with such summary barbs as “your name says it all”. We yell. We scream. We thump our chests with the fighting spirit of our tribal kinsmen. We mope about in our houses at the thought that our country is going back to the brink of chaos. We are extremely vain. Vain at the thought that we have come to the end-of-our-world-as-we-know-it, once again, at the behest of politicians on both sides of the divide and their pathetic, puerile war mongering. Our vanity stems from the thought that the self-centred, round-the-clock guarded, filthy-stinking-rich political elite will drive us over a bloody cliff.

Well, the investors in Kenya’s debut Eurobond just gave us a reality check. They just told us: “Well that’s a mistake, it’s never going to happen and here is $8.8 billion proof that we’re putting our money where our mouth is!” What in heaven’s name is going on with international investors? Have they gone mad? Did they not read the 139-page Republic of Kenya Eurobond Prospectus? A prospectus for any publicly traded debt or equity issue must clearly articulate the risks faced by the issuing entity. The Eurobond prospectus takes a no-holds-barred approach and tells investors what we Kenyans already know. We are two cents short of a third world basket case with identified risks such as a significant unrecorded economy, unreliability of our statistical information, corruption and money laundering, untested legal reforms that can adversely effect the Kenyan economy, internal security issues, political instability from the ICC, shilling depreciation risk….you get my drift (and if you don’t, grab yourself a copy of the prospectus).

A seasoned Kenyan banker will tell you that nothing gives an international lender more sleepless nights than what is called cross border risk, that is, that the government of a foreign currency borrower will put in place restrictive policies on the convertability of local currency to foreign currency or the transferability of that foreign currency to a jurisdiction outside the home country. (In case of any doubt, ask the Zimbabweans). Sure, of course you will say that this is Government of Kenya borrowing themselves and they will always ensure that the foreign currency is available to repay the debts. However as a net generator of local currency, the Government has to purchase that foreign currency in the open market. If it can’t then the risk of government debt default becomes clear and present as happened in Russia in 1998, Argentina in 2001 and Greece in 2012. There’s not enough space to write what happened in each of those cases but the upshot is the same: those governments simply ran out of money to pay their international debt obligations.

The impact on such default is immediate in the international markets with regards to the country’s credit rating. The Fitch rating (where Fitch are one of those chaps who put a ton of data into a computer that generates a risk rating algorithm whose outcome is bible truth to investors) for Kenyan sovereign international debt is B+. The Kenyan rating is higher than that of Greece at plain B and Argentina at CC. Which explains why it was imperative that the Anglo Leasing payments be made as non-payment of a Kenyan sovereign payment obligation would definitely drive the credit rating, which in turn drives the pricing and placement of the debt in the international market. But why would the international investors want to buy Kenyan paper on the day after one of the most vicious attacks on Kenyan citizens made headline news globally? Why would they want to buy Kenyan paper when there are several other emerging market economies with higher credit ratings and therefore less perceived credit default risk? Because these savvy investors have seen it all. From wars in the Middle East to sluggish economies in the west. From octogenarian dictators in teetering Zimbabwe to who-the-heck-is-in-charge of the profligate government of Greece. But as my favorite investment banker told me last week, it comes down to one thing: Kenya is one of the highest performing non-resource economies on the continent. We are not (yet) producing oil, gold, diamonds or copper but continue to grow at a 4% GDP rate and blaze the trail in telecoms and banking penetration. The investors see a steely resolve in the Kenyan economy, a resolve to continue at growing despite ICC tribulations. They see a necessary pressure valve called loud, unfettered political rhetoric combined with a vibrant national assembly both of which help to release pent up political frustrations rather than going the South Sudan way of the gun. The investors see an economy that has, since 1992, consistently had five-year knocks and positive rebounds in line with the multi-party electoral cycle. The investors see a well-educated populace that does not need to import talent for management of key economic sectors. The investors see a commitment to infrastructure roll out that continues to make Kenya the country of choice for establishing a regional presence. We don’t see it. All we see is noise, death, destruction and a bleak future. Well we’ve just witnessed $.8.8 billion reasons why perhaps it seems brighter from the outside. The Eurobond investors have told us what is we are too blind to see. Kenya rocks! Congratulations are due to Henry Rotich and his Treasury team for an excellent outcome.

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Twitter: @carolmusyoka

The CFO of a company asked his CEO, “What happens if we invest in developing our people and then they leave the company?”
The CEO answered, “What happens if we don’t, and they stay?”

I was recently asked to speak at a conference for women in leadership that was extremely well attended. The speakers (of both genders) at the conference were luminaries in their respective fields who brought incredible insights on work place challenges and best paths to navigate for a career woman. I would have loved to have an opportunity to attend such a conference when I was still in employment. I write this because there were a significant number of no-shows, women who had signed up and paid to attend but had “last minute” work related issues that prevented them from investing in themselves.

As a number of them were from one particularly large company, I asked a former employee of that company as to whether this was a corporate culture to sign up for training and then give it a miss. Her answer was as insightful as it was worrying. “The problem with women in senior positions is that they treat their jobs the way they treat their families: life cannot go on without their involvement in every aspect and the family/job will collapse in their absence.” Well, I stopped dead in my tracks. I had never thought about it from that perspective. I asked her to go on. “You see Carol, you will never find men missing out on training. They know that the training will personally help their professional growth and they vigorously take up company sponsored training to improve their skills which can be used at their next job. For men, it’s all about what’s in it for me.” Now, I write this with much trepidation. The last time I tried to opine about the problem that women put themselves squarely in, I was labeled a sell-out to the female gender. But cowards never die, so here goes: “It’s never that serious.”

What is never that serious, you ask? Your job; It’s never that serious! It can, and will, go on without you. A few months ago, I was training some senior executives of a multinational and this very issue came up: how indispensable are staff members. One fellow, who was getting quite agitated with the tangent that the discussion was taking, volunteered a recent experience. The previous week, a colleague had passed away on a Friday. The news was received with the usual shock and sorrow and the team began planning for how they could support the family. When they came to the office on Monday, the colleague’s desk had been cleared, much to their surprise. But that was not the only surprise in store as by 11 a.m. there was another gentleman sitting in their colleague’s seat…working! As the fellow regaled us with the story, expecting the requisite sympathetic clucks of the listening crowd, he was rather surprised by the lukewarm reaction. “Buddy,” one of the other senior executives began, “this is not our company and life has to go on. Did you expect the company to stop?” This was a peer-to-peer checking mechanism in play coming to the same conclusion: It’s never that serious!

Your ‘permanent and pensionable’ employment contract is in practicality a rolling thirty-day contract that starts on the beginning of the month and ends on the date you receive your salary. The contract is then rolled over for another thirty days ad infinitum. The contract ceases to exist at the point where you part ways with your employer, which is increasingly becoming less than the 30 plus years of the baby boomer generation. Within those thirty days, the company might decide to invest in you by sending you for a training program. Your company doesn’t do that as part of its Corporate Social Responsibility goals of educating members of society that lack access to quality education. It does that with the primary goal of adding value to a resource (you) with the aim of extracting a return on that investment sometime in the future via an appropriate application of those very skills that you have been trained in. But here is the secret: those skills you are being trained in can be applied in another organization.

Companies shrink and expand depending on their strategic intent, their life cycle in the industry or the outlook of future financial performance. Tucked within that shrinkage and expansion lie our jobs that are never indispensable contrary to many a self-important thought. We give our best performance –or so we think until we undertake the periodic performance review – at our jobs and are appropriately remunerated for it monthly. Our companies invest in training us to enable a better performance of our jobs that will invariably lead to a better performance on the company’s bottom line.

By training you, the company is pouring a little bit of fertilizer on the cabbage patch of your personal growth. Your colleagues who do not have the same opportunity will either have to self-finance the purchase of that knowledge or just make do without it. You have a distinct knowledge advantage over your colleagues when you are sent for training. That knowledge will not be required to be put in a package and passed on to your colleague at the annual staff Christmas party. It is yours to do with as you please, to apply in whatever future jobs you may hold, now and forever amen.

Missing out on a training opportunity is a crime to oneself. Missing out on a training opportunity because of not being able to tear oneself from the work desk is an even bigger crime. If no one else can do your job for the two or three days that you should be investing in yourself, you are either the best chimney sweeper south of the Equator or very poor at delegating to your subordinates. It’s never that serious.

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Twitter: @carolmusyoka

On Monday, January 13th 2014, I took my young and still wet-behind-the-ears cousin to register as a student at the University of Nairobi’s main campus. I had been appointed by the clan to be the responsible family member since I was the most recent graduate of the veritable institution (where recent is a relative term). Having arrived from the lush Nanyuki plains the day before with a 20 kg wheeled suitcase, my cousin had no idea what was in store for her.

Early that morning, I drove as close as reasonably possible to the pedestrian gate opposite the Jewish synagogue and pointed, “Go past that gate, you should find the registration desks there.” She looked at me like I was out of my mind, “Aren’t you coming with me?” I gave her a baleful eye, “[insert ladylike expletive here ] NO WAY! You’re an adult now and this is not high school. No one is taken to university by their relatives.” Look, of course there are people who take their relatives to university on the first day. But it’s because THEY DON’T KNOW UNIVERSITY OF NAIROBI! My parents certainly didn’t take me to register as the bright eyed, bushy tailed fresher that I was. They knew. They had been victims of wanton riots many a time as my late father’s office was proximate to the university and he dodged a rock or two many times in his professional life. Anyway, back to Cousin. So I dropped her off and high tailed it out of there, with explicit instructions that she was to call me when done with registration so that we could go home and collect her suitcase and then bring it to her hostel. By this time, I was actually quite impressed with the progress that the university had made since the 18 years I had left. Cousin had been given a pack with information about where to register, which hostel she was in, which medical processes she should undertake and the process of getting a pre-paid meal card. Maybe you didn’t read what I said: She-had-a-pack-of-information! There was even information on how students were to go online in order to register for their hostels. What? In 1992 an indifferent registration clerk would point with their lips in that stretched ubiquitous Kenyan way as to where one needed to go to hassle for a room.
Needless to say, Cousin called me at 4 p.m. sounding totally exhausted. I picked her up from what was supposed to be her hostel. She was flushed, flustered and flabbergasted in that order. Having been tossed about like a grenade in an Irish pub the whole day, she had only partially completed her registration. She had schlepped across to the hostels to secure a room as a rumor swept the Great Court that rooms were running out despite the fact that some students had online confirmations of room allocations. Getting to the room in Hall 8, she came to discover that her room was secure. But there were neither beds nor beddings in the dust and grime filled room. She clambered into my car exhausted and could hardly speak.
“The registration process is horrible,” she sobbed, “everyone crowds around the table, pushing and fighting as people try to get attended to and no one wants to follow the queue.” I gave her an empathetic pat on the shoulder. “The watchman is the only one who seems to know where people should go. There are no signs to tell anyone where to go or what to do.” Hmmm, I thought. The more things change the more they stay the same. This sounded like my experience in 1992 when I first joined the university. To cut a long story short, Cousin had left her friends at the Great Court still struggling to register as two of them did not have a hostel. She didn’t know where they were going to sleep as they had come with their luggage and without their relatives. Two of her other friends went off with Nairobi relatives to spend the night. Following a disastrous first day, her registration process took the whole of Tuesday to complete, but the hostel still didn’t have beddings. She ended up getting a bed and mattress on Thursday, a good three days after she first went to register. The University of Nairobi essentially mistreated the new students as they have consistently done over the last twenty years. The students were treated with indignity, had to fend for themselves for the first three days and basically fight just to get recognized as the students in what used to be Kenya’s number one institution of higher learning. A majority of these students had never been to Nairobi before. They were cold, hungry and left to use their animal instincts to get registered.

Watching Cousin’s humiliating entry into the real world of public university, the penny finally dropped on why public university students riot. They have been socialized from the minute they enter the university to think and act like caged animals. From the indignity of shoving and jostling for attention at the registration desks to the missing beddings in the hostels, the university demonstrates that it’s a man-eat-man culture when you step into their not-so-hallowed grounds. A number of lecturers appear in class only if they are so inclined with no consistency check by the university authorities on the quality of education they are imparting. Books in the library are virtually non-existent. Security in the hostels is comedic as the rooms are regularly hired out by the janitors or students themselves to secretaries, clerks and criminal elements looking for proximity to the CBD. It’s a jungle in there and the powder keg that is the students’ psyche does not require much to ignite. It is pointless to keep blaming the students for their rioting tendencies for as long as their hosting institution inducts them like wild animals and does nothing overtly possible to maintain hygienic standards for their living conditions. After all, when in Rome, do as the Romans do.

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Twiiter @carolmusyoka

If you have had the good fortune to recently travel to the Rainbow Nation that South Africa is, you would be hard pressed to find any overt vestiges of the apartheid policy that reigned supreme 20 years ago. The first batch of “born frees” (citizens who were born post 1994 when Mandela became the first black president of an apartheid free country) voted for the first time this month in the general election, unburdened by the historical baggage of a politically and socially oppressive apartheid environment. They were voting based on black leaders who had been in power and driven the political economic and social agenda of their country throughout their lifetime. They had no immediate point of reference of life before black rule other than the rambling musings of their parents. The born frees have a self-driven economic lifestyle based on the elasticity of their wallets. But how much financial independence does the average black South African really have?

An opinion piece titled “The Illusion of Good Stories to Tell” by Prince Mashele, an author, in the May 18th 2014 edition of the South African Sunday Independent provides some illuminating insights. He traces the wealth of South Africa starting with the discovery of diamonds in 1867 and gold in 1886 and how the “Randlords” – white mine owners who organized themselves into a powerful cartel – constructed a social hierarchy that remains intact in mining today. Mashele writes that the Randlords decided that a white man would be at the top of the social hierarchy and that a black man must permanently supply cheap labor in the service of the white man. Subsequently, as the English and the Afrikaners did suffer their own internecine conflicts, they united in 1910 toalllow all whites to exploit black labor. The English largely owned the mines and the Afrikaners owned the large farms with economic benefit going primarily to the white people at the expense of cheap labor provided by the blacks. By excluding the blacks from access to good education, Mashele points out, the white men ensured perpetuity in the economic benefit arrangement. But Mashele then challenges the myth that “self rule” has brought prosperity to the blacks. “Since there are now a few BEE millionaires, who made money from minority stakes in white-owned companies, the ANC is misled to see “ a good story” that does not exist. The truth is that Cyril Ramaphosa’s rise to the millionaire’s paradise has done nothing to alter Cecil John Rhode’s logic – that in the mines, black men must work underground untrained and underpaid. It would indeed be hard to find evidence of the contribution of Ramaphosa’s new millionaire status to economic growth in South Africa…..The ANC’s illusion of history is also generated by the palpability of the black middle class, largely a post-1994 phenomenon. It is true that, in the main, members of the black middle class do not work for white men; they work for the state and its extensions. This is what makes black bureaucrats feel they are part of the good story to tell”. The truth story to tell, though, is that bureaucrats do not produce wealth. They, as Walter Rodney points out, “squander the wealth created by the peasants and workers by purchasing cars, whisky and perfume.”

I read and juxtaposed Mashele’s powerful opinion piece to the context of devolution in Kenya’s counties. County citizens are now “empowered” and “self governing” on theoretical constitutional paper. Devolution was marketed as the antithesis to the central government’s historical inefficiency at bringing development to all corners of our sun kissed country. However, a ruling elite has now been replicated 47 times into the devolved counties made up of Governors, their cabal of rent seeking MCA’s and the attendant tenderpreneur purveyors within the county supply chain. Institutionalized corruption over the last thirty years of Kenya’s independence has created an elite of extremely wealthy civil servants who pump their newfound wealth largely into real estate and construction (the story is anecdotally told that the Kenya Revenue Authority’s objective to map out all large rental units will never take off as their own staffers as well as colleagues within the government are the primary landlords in Nairobi).
County citizens wait with bated breath for the development that they were promised, for the big manufacturing companies and service industries that would come to provide employment to the hundreds of unemployed youth that roam the dusty, unpaved streets of upcountry towns. They wait for the tarmacked roads, for the piped water, the electrification of candle lit homes, for the route-to-market for their agricultural produce. After all, the governor is one of them, a son of the soil who knows where the shoe pinches most and how to ease the suffering. There will be county millionaires for sure. They will strut the streets in their genuine leather shoes and two cut single-breasted suits purchased at the air-conditioned Emirates Mall in Dubai. They will do nothing to create employment through value adding industries. How can they? Their offices consist of a briefcase and a wireless printer in the backseats of their cars. The bureaucrats in the red carpeted County Governor’s offices will amass wealth on the back of “taxing” the new found revenue collection from county citizens in the form of licences, cess, rates and fees.
A good story will be told. There will be some roads, health centres and cattle dips built. But at inflated costs that will create wealthy individuals and a relatively unaffected citizenry five years after casting a hopeful ballot. A whole new generation of Kenyans is being created to aspire to public office. That public servants are the face of Kenya’s wealth distribution and real economic benefits is the rapidly unraveling cultural narrative that the next generation of young Kenyans is being unconsciously fed. I hope that this culture will be reversed before it becomes deeply entrenched. But then again, hope is not a strategy.

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Twitter: @carolmusyoka

This week, I had purposed to unpack the NSSF Act 2013. Then my favorite tax guru sent me some information on the same to help me break it down. I got a headache by the time I got to the calculations and collapsed into a veritably confused heap. I tossed that idea out of the window immediately. So I switched to my current favorite subject: “devil-ution ”. On 4th August 2010, Kenyans voted 66.9% in favor of the new constitution that created a devolved system of government. We did this. It wasn’t shoved down our throats by the existing government nor was it a roadside declaration by the then President. We exercised our democratic rights to do this to ourselves. What we failed to pay attention to was that it was going to require a lot of money. The naysayers at the time told us as much. But we ignored them. The devil is always in the detail, and the devil-ution chicken has come home to roost.

Now county citizens are up in arms at the new taxation measures that county governments are undertaking in order to finance their operations. The sad and hopeless fact is that the primary revenue source for any government is taxation. Many people do not seem to realize this. Perhaps a history of taxation is relevant here. The website e-file.com has a rich history of taxation and reveals that the earliest known tax was implemented in Mesopotamia over 4500 years ago, where people paid taxes throughout the year in the form of livestock, which was the preferred currency at the time.
There were also very many unusual taxes incurred by ancient governments with the aim of raising revenue.

For instance during the 1st century AD, Roman emperor Vaspasian placed a tax on urine. Buyers of the urine paid the tax. The urine from public urinals was sold as an essential ingredient for several chemical processes e.g. it was used in tanning and also by launderers as a source of ammonia to clean and whiten woolen togas etc. Therefore, those who obtained valuable urine from collectors were charged a tax. Centuries later, King Henry I allowed knights to opt out of their duties fight in wars by paying a tax called “scutage”. At first the tax was not high, but then King John came to power and raised it to a rate of 300%. Some claim that the excessive tax rate was one of the things that contributed to the creation of the Magna Carta, which limited the king’s power. In 1660, England placed a tax on fireplaces. The tax led to people covering their fireplaces with bricks to conceal them and avoid paying the tax. It was repealed in 1689.
In 1696, England implemented a window tax, taxing houses based on the number of windows they had. That led to many houses having very few windows in order to avoid paying the tax. Eventually this became a health problem and ultimately led to the tax’s repeal in 1851. In the 1700’s, England placed a tax on bricks. Builders soon realized that they could use bigger bricks (and thus fewer bricks) to pay less tax. Soon after, the government caught on and placed a larger tax on bigger bricks. Brick taxes were finally repealed in 1850.
There are numerous other examples of strange taxes that were created around the world, but the important outcome of these taxes were the avoidance mechanisms that citizens would put in place to mitigate the expense. What county citizens need to shift focus to is how their valuable tax shillings are spent. We can’t avoid the taxes as certainly as we can’t avoid death. But we can and should hold our tax collectors to account for how they spend our money. Installing clean toilets, running water, security and lights in the fresh produce markets would be a good place to start. You can’t be taxed and yet expect to roll over and play dead if you cannot see where your tax shillings are being spent. You should then spend your limited energy on street protests not against the tax (as that will most certainly fall on very deaf, cash starved and battle hardened ears) but on the appropriate use of that money. The conversation then changes to one of accountability from the county government and acceptance of the decision you made on August 4th 2010.

It will be disingenuous of us to expect functioning health facilities, roads, garbage collection and other services provided by the county governments if we are not willing to pay for them. That it will take a tax on our chickens is another story, but if that is the most likely wider source for bringing us into the taxation bracket then so be it. We need to remember that county governments are not businesses that can opt to manufacture goods or provide mobile telephony in order to generate the revenue that will help develop the county. We seriously need to stop lambasting the county governments at every turn when they are trying to keep afloat. What we need to do is hold them to account and keep that pressure up relentlessly: you want to tax my chicken? Then help me find a good market for it. You want to tax my lorry delivering produce to a market? Then provide a good parking and secure facilities to offload and store my goods efficiently. You want to tax my boda-boda? Then maintain the roads on which I operate to reduce the cost of servicing my machine and provide a dedicated and secure parking zone where I can operate from. Change the conversation; rise up in protest about the use of the funds and not the source of the funds. We will then start to see less devil-ution rhetoric and more “let’s kick these ****** out of office and get people who can deliver what we pay for” conversations.

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Twitter: @carolmusyoka

Site meeting in Kampala in the morning, lunch in Nairobi and sundowner drinks in Dar es Salaam caps a busy East African day at work. That is the synopsis of a television advert currently on Kenyan television stations promoting the use of a helicopter service that can get you hopping around the region easily. Businesses are taking the East African Community opportunities very seriously. But the East African governments want us to take this to a whole new level by introducing a common currency in the next ten years. Let me begin by saying, I am not an economist by any stretch of the imagination. Neither am I a soothsayer nor wizard for that matter. I only ask the following questions as a concerned East African citizen that can ill afford to take a helicopter ride around the 5 capitals of the community.

Our governments will have us believe that a common currency is an imperative outcome of the push to creating regional economic and (God help us) political integration that will help us citizens achieve our wildest success at the altar of capitalism and free market economics. The common currency – let’s call it the East African Shilling (EASh) for now- will reduce the cost of business as it will eliminate trade barriers in the form of currency exchange losses incurred by cross border transactions within the region. The common currency will ease the burden of travelling across borders, as we will not have to go to our favorite forex bureaus and seek the elusive Kenyan, Tanzanian or Ugandan Shillings or Rwandese or Burundian Francs. The EASh will further stimulate the movement of capital, goods and people and enable price transparency, as there will be one unified unit of measure for goods. That’s the official story and they’re sticking to it. What we are not being told is why not? Why haven’t other regions come up with a single currency?

A single currency has to be issued and monitored by a regional central bank. That regional central bank will be charged with setting the monetary policy, issuing bank notes, setting interest rates and keeping inflation low. Monetary policy is the process by which the central bank controls the supply of money often using interest rates to promote economic growth and stability. For instance, if there is widespread unemployment, the central bank can drop interest rates, (and in Kenya for example, reduce the Cash Reserve Ratio which banks are supposed to maintain at the CBK) with a view to encouraging banks to lend to the private sector. More loans to businesses means more working capital which increases production and creates a need for more employees. More loans to individuals means more money to burn buying goods, which means retail outlets increase business, employ more people…..you’re catching the drift by now. The only problem is that this leads to an economic boom, which in turn leads to inflation as goods become more expensive due to higher demand than supply. Higher inflation leads to an economic bust, a recession is sure to follow with its attendant job cuts and market depression and the whole cycle starts again of trying to jump start the economy.

So the question here is, will our East African Central Bank be able to manage the monetary policy for 5 economies that have varied rates of economic growth and varied sources that generate gross domestic product? I hazard a guess that all the EAC economies are net importers and therefore constantly suffer from current account deficits. These deficits can only be reduced if we export more, meaning we have to produce more in country. If one, or two or three of us increase our domestic consumption of things imported, we immediately begin to put a strain on our EASh as we drive demand for limited foreign currency to purchase the imports. The other two countries that are living within their means begin to see their currency devaluing with no immediate short-term option to increase value through increased exports. The East African Central Bank (which by this time is scrambling about trying to buy dollars to maintain an IMF driven floor limit of 3 months’ import cover) will raise interest rates to tame the inflationary spending of the one, two or three rogue spenders while hurting the other two countries who were minding their own business living within their means. As a result, businesses in these two innocent countries start to suffer as higher interest rates means lower access to credit which means lower production, lower employment…..you catch my drift by now.

One country sneezes and the rest of us will catch the plague. That’s what a unified currency does. There is no way of knowing whether Tanzania’s fiscal policy of raising domestic taxes will be successful to enable it to meet its expenditure budget. If it is unable to raise enough domestic taxes it will have to borrow from financial markets by issuing treasury (or God help us Eurobonds) or bills. If Kenya, Tanzania and Uganda for example are consistently unable to balance their budgets and have to seek external borrowing, there will consistently be pressure on the EASh as the three governments have to find the foreign currency to make the borrowing repayments. And may God help the unsuspecting East African citizens who haven’t been exposed to the Kenyan government’s attempts at funding a wickedly expensive devolved government and the vapid attempts to raise funds through weakly drafted taxation and social security laws. A weak EASh can only strengthen on the back of increased domestic production of goods and services as well as extreme fiscal discipline on the part of not one, not two, not three, not four but FIVE countries.

But as I said, I am no economist. I am but a simple citizen of an East African Community member whose government has promised her nirvana when she enters the haloed grounds of a common monetary union. I’d better get my flu shots updated and get a face mask prepared for the massive cold I am going to suffer when I start to share wallets with my four neighboring countries.

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The law of unintended consequences, often cited but rarely defined, is that actions of people always have effects that are unanticipated or unintended. A good example is found in businesses that have undergone a period of rapid expansion with the resultant increase in revenues followed by a plateau or decline in sales due to unforeseen circumstances such as the entry of a competitor. A typical knee jerk reaction for many businesses is to cut costs, with labor being the softest target. A series of retrenchments within businesses leads to lowering of staff morale and the unintended consequence is that good staff then start to leave as they are uncertain of the organization’s future. As good staff start to leave, management provides incentives such as higher pay to retain talent and the vicious cycle of increased costs begins to play out again.

But that example is rather obvious, though oft repeated by organizations. A less apparent illustration of unintended consequences occurred in a year ago, on 4th December 2012 at the most unlikely of places – the King Edward VII hospital in London where the Duchess of Cambridge had been admitted with severe morning sickness in the early stages of her pregnancy. Two Australian DJ’s from 2Day FM in Sydney, Mel Greig and Michael Christian, called the hospital purporting to be Prince Charles and Queen Elizabeth inquiring about the Duchess’ health.

Jacintha Saldhana , the nurse who received the 5:30 a.m. call as the hospital’s switchboard operator was not on duty, mistakenly believed the DJs to be genuine and put the call through to another nurse who went ahead to give personal details of the Duchess’s condition to the pranksters. 3 days later, Jacintha – a mother of two teenage children- was found dead in the hospital’s nursing quarters in an apparent suicide. The pre-meditated prank had allegedly been cleared with 2Day FM’s lawyers before airing. While the intended consequences had been to entertain and titillate the station’s listeners, the unintended consequences resulted in the suicide of one of the prank’s victims. Following the tragic outcome, a media backlash ensued both in the United Kingdom and in Australia resulting in threats and actual boycotts of business by advertisers on the radio station. This is ideally where this tragic story should come to an end. But it doesn’t.

Following the suicide debacle, Christian moved to work at another radio station owned by the same parent company Southern Cross Media, this time in the city of Melbourne. In June 2013, six months after the tragedy, he was named the “top jock” by his employer in an internal competition to find the “best in the land”. According to his employer’s website, it was a reward for his role in the company’s community of seasoned and emerging talent.

“From the start I felt like I had something to prove to myself,” Christian said. “That regardless of all that’s happened in the past few months I’m still at the top of my game. So it felt good to see my name at the top of the final leader-board.”
The Independent newspaper in the UK reported that Stephen Conroy, Australian communications minister, criticized the award. He said: “There was some very serious consequences of what was a prank and to be seen to be rewarding people so soon after such an event, I think is just in bad taste.”
So you would think that it couldn’t get worse than this from a public relations perspective, right? Wrong! Southern Cross Media is clearly not a learning organization and this was apparent later in the year when the Chairman of the company made a less than appropriate statement regarding the suicide debacle. At the annual shareholders meeting in October 2013, the Chairman Max Moore-Wilton was answering a shareholder’s question as to whether there was a cultural problem within the organization following the UK incident and two others incidents also involving other DJs who promoted outrageous commentaries live on air. The chairman’s response was “In each particular case we thoroughly investigated them and it comes generally within the context of some of these incidents where a whole series of events come together and in the immortal words of somebody who I forget, S-H-I-T happens.”
I guess it helped that he spelt out the words rather than said the actual profanity in the interest of minding his language. The unapologetic chairman was quite obviously pilloried in the media thereafter, especially since he claimed that the use of such language was “common every day parlance” in Australia. “If you don’t like it, or the media don’t like it, well that’s fine,” was his response to the Australian Associated Press.
As stated at the beginning of this piece, the law of unintended consequences is that actions of people always have effects that are unanticipated or unintended. In the case of an Australian media company, what started off as a prank call that was approved by the legal team ended up with a series of public relations gaffes that put the company under the harsh media glare in both Australia and the UK. The company was also put under investigation by the communications regulator in Australia on whether the radio station had breached its broadcasting licence immediately after the suicide tragedy. The regulator’s preliminary findings, which Southern Media has appealed, were that indeed there was a breach of the law. The award of “Top Jock” to one of the DJs demonstrated that the company was quite happy to let bygones be bygones despite the public backlash that the DJ’s activity had generated. The chairman of the company was also put on the spotlight by shareholders and revealed, in very flowery response, the casual view with which he (and/or the company) took some very serious events. The unintended consequences of two Australian DJs were to tragically impact an Indian nurse in London and an Australian company all the way to the top of its corporate food chain.

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The CEO leaned back in his chair and crossed his legs. The meeting was going supremely well. The board of directors had been convinced to acquire a smaller company in a neighboring country that provided the same kind of services as his company. It would enable his company to penetrate the neighboring market much easier by providing access to an existing distributor and client base. The CEO smiled to himself. He had anticipated that it would be difficult to convince the directors who had shown a historical aversion to cross border acquisitions so he had quietly engaged the three usual vocal directors before the meeting and got their buy-in in advance. “Alright then,” the chairlady concluded, “shall we pass a resolution for the CEO to conclude negotiations with Technoco?” Around the room, most of the directors were nodding their heads, eager to bring the meeting to an end as it was late in the afternoon and traffic was already thickening outside. Mary, one of the newer directors on the board, was however fidgeting in her seat and frowning. She had previously worked in that neighbouring country before moving back to Kenya and knew the difficulties faced by Kenyan companies that had tried to penetrate that market. She was also aware of the neighboring government’s policies on labor laws, which created a difficult operating environment. She wanted to speak out about her experience and knowledge, but the mood in the room was buoyant and optimistic about the acquisition with at least three of the directors being quite vociferous in their support of the transaction. The chairlady, who was usually quite intuitive, immediately noticed Mary’s discomfort. “Mary, you look like you have something to say.”

Mary looked around the room, feeling quite uncomfortable with several pairs of eyes staring at her, some of which looked remarkably impatient. “Actually Madame Chair, “ Mary ventured, “I honestly don’t think this is such a good idea. My experience in that neighboring country tells me to exercise some level of caution before making an investment of this magnitude.” The CEO muttered something under his breath, which Mary guessed was less than polite. He leaned forward in his chair, putting his elbows on the table. Mary had come to recognize that move. It meant that he was going to explain something very difficult to someone very ignorant. She braced herself for the condescending explanation that was sure to follow. Around her, the other directors were nodding vigorously at every sentence the CEO said. After all, he had driven the company to 1000% growth in Kenya over the last five years through the careful and systematic execution of the company’s strategic plan. Every new initiative that the board had approved for execution had been successful and the directors were starting to believe that they were not only onto a good thing here, but that their CEO was a visionary who could do no wrong. Mary knew that this board suffered from the dangerous affliction of group think, a phenomenon that often occurs when the desire for group consensus overrides people’s common sense desire to present alternatives, critique a position or express an unpopular opinion. Typically the desire for group cohesion effectively drives out good decision-making and problem solving.

She was at a psychological crossroad. She could either buck the trend and carry on with her point until someone finally listened or she could keep quiet and go with the flow, thereby avoiding a long and windy discussion that would most likely end up with the CEO winning anyway. She looked at the chairlady for guidance, hoping to see a small sign that would encourage her to carry on with her alternative view.

The chairlady stared at her blankly in a deliberate attempt to remain neutral. Mary looked around the room and found a subtle shift in attitudes towards her. There was almost a sense of you-versus-us and an understated urgency to bring the matter to a quick conclusion. “Fine, Madame Chair, I’m sure the transaction will make sense to the company’s overall objectives and we should go ahead and do it,” she caved in.

The concept of group think works well for boards and management teams that believe in consensus building and cohesion, But it is a fatal flaw for an organization that is making critical decisions that need to be analyzed through a comprehensive and rigorous decision making lens. Consensus should be built once all the pros and cons of a decision have been extensively discussed. It is prudent to always appoint a team member to play the role of devil’s advocate for no other reason than to poke holes at any decision being made and essentially make a case for why that decision will fail. The end result of intervention by the devil’s advocate is that a comprehensive review is undertaken of the topic at hand and in some cases an outside expert can also be brought to provide an independent view from that of the project sponsor. The review should end up with clear mitigating steps for implementation in case of the project’s failure. Only then should consensus be built on how the project should be executed and what exit plan should be put in place if the project runs into difficulty.

Two years later, Mary sat at an emergency board meeting that had been called to discuss the Technoco acquisition. Workers had gone on strike and the government of that country supported the workers union obtuse requests. If the company caved in to the demands, costs would escalate and the company would collapse as they would not be able to raise prices in tandem with the rising costs. She looked around the room as directors animatedly discussed the situation, interrogating the CEO as to why he had allowed this situation to arise. No one remembered her quiet, attempted intervention of two years before. She would remind them of her previous advice and, going forward, assert herself regardless of the popular opinion.

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A few years ago some scientists decided to do an experiment. Inside a cage, they hung a banana on a string, placed a set of stairs under it and placed five monkeys inside. One of the monkeys started to climb the stairs toward the banana. As soon as it touched the stairs the experimenters sprayed all the other monkeys with cold water. When another monkey made an attempt to get the banana they again sprayed the other monkeys with cold water. Consequently, the monkeys prevented any of their group from going after the banana.
The scientists took one of the original monkeys out of the cage and introduced a new one who, upon spotting the banana, went after it. To its surprise all of the other monkeys attacked it. After another attempt and attack the new monkey learned that if it tried to climb the stairs and get the banana it would be assaulted and so it stopped going after the banana. Next the experimenters removed another of the original five monkeys and replaced it with another new one. The second new monkey went to the stairs and predictably it was attacked. The first new monkey took part in this punishment with enthusiasm! Every time the newest monkey took to the stairs it was attacked by the other monkeys. Most of the monkeys that were beating it had no idea why they were not permitted to climb the stairs or why they were participating in the beating of the newest monkey. After all the original monkeys were replaced none of the remaining monkeys had ever been sprayed with cold water. Nevertheless, no monkey ever approached the stairs to try for the banana. Why not? Because as far as they knew: “That’s the way it’s always been done around here.”
Some might remember the slew of ridiculous, sycophantic advertisements that were placed by state corporations and agencies in April and May this year congratulating the newly elected president and deputy president of the Republic of Kenya. Quite frankly speaking, I highly doubt that the targets of those pledges of loyalty cut out the adverts and filed them for posterity in a blue folder next to their bedside lamp. The prime beneficiary of those pathetic attempts at maintaining relevance in a changing administration were the newspaper advertising departments that quite likely surpassed their budgets for those two months. Enough said. I thought that we would not likely see misuse of funds for relevance advertising until the next general elections. I was wrong. On Wednesday, October 16, 2013 the Kenya Industrial Estates Ltd (KIE) placed a full-page advertisement in the Daily Nation that left more questions than answers as to what message was being communicated. First off, let’s take a roll call. How many under the age of 40 have ever heard of KIE? That’s right, I didn’t think it would be more than twenty of you. But our extremely hardworking Parliamentary Investment Committee, who require a packed agenda in order to maintain a busy calendar (and not to collect sitting allowances) trawled through the government parastatal roster and dug KIE out of a fox hole in order to question management’s performance.
Whatever the PIC’s findings were, it warranted a full-page advertisement of a response to what the media published about said findings. Chinua Achebe, in his epic chronicle Things Fall Apart quoted an Ibo proverb: “A toad does not jump in the daylight for nothing.” Shortly before this advertisement was placed, the media had reported widely about the recommendations of the Task Force on Parastatal Reform that was appointed by the President in August 2013 with a six week mandate to, amongst other terms of reference, review the draft policy on state and county corporations, review the inventory of state corporations and classify them by function and scope of operation in terms of regional coverage as well as consider and recommend general institutional arrangement for all state corporations.
The terms of reference in their entirety must have sent a shiver down the spine of most parastatals, especially those that have operated below the radar for the last 20 years and have typically been used to reward cronyism, exert ministerial fiefdoms and perpetuate parochial tribal and political interests. Suddenly the parastatal reform process would shed light on the existential rationale of moribund, money guzzling, non-revenue generating institutions. The gravy train runs the danger of shuddering to an unimaginable halt. Which is why, perhaps, the role of the PIC becomes quite critical at unearthing the hidden items in the fox holes every now and then, and shaking off years of dust and grime to determine what’s hiding under there.
The opening story in this column is actually called “monkey see, monkey do.” The congratulatory messages sent to the President and Deputy President earlier this year were a classic example of the way things are done around here. Access to State House is deemed- quite bizarrely- to be via print media. What the KIE advert has done is to likely begin a trend of existential rationale amongst parastatals fearing “annihilation” if the recommendations of the task force are implemented. The role of KIE is to finance micro, small and medium enterprises in Kenya, a very noble role which is also replicated by the Women’s Fund, Youth Fund, Uwezo Fund. To its credit though, the KIE does differentiate itself in that it provides serviced workspaces through construction of industrial estates in fast growing business centres. Perhaps I am not in the target market of this veritable institution and I therefore have limited access to its sphere of influence. I would however recommend to all such parastatals to spend their advertising revenue on letting Kenyans know how and where to access their services rather than spending money on messages that are aimed at being plastered as wallpaper on the offices of the powers-that-be. We all recognize that once that report is presented to the President it will become survival of the fittest. Good luck to all of you!
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“When the missionaries came to Africa they had the Bible and we had the land. They said, ‘Let us pray.’ We closed our eyes. When we opened them we had the Bible and they had the land.” Bishop Desmond Tutu

Last week, I had the pleasure of listening to Daniel Silke, a leading South African futurist talking about global trends in the next 40 years. I arrived at my own worrying conclusion by the end of the talk: the African future is trending towards a second wave of colonization. Our colonial masters will not be pale faced, bible wielding strangers riding on an iron snake. They will be of oriental extraction and will have been welcomed by us natives with wide open and loving arms, drunk with romantic illusions of mutually beneficial interactions.

Let me share some of the facts that Silke illustrated to set the context first. From not a single kilometer of highway in 1988, China now has a world-class network of 41,000 kilometres, second only to the United States. The equivalent of Britain’s current electricity output is being added to the capacity of China’s grid every two years. China today exports more in a single day than it exported in the whole of 1978. China’s middle class is expected to be a little of 1.4 billion by the year 2035, which is about 22 years away. The infrastructure driven growth economy in China has led to China consuming 53.2% of total global cement consumption, as well as 47.7% and 46.9% of global iron ore and coal consumption respectively.

But as the infrastructure continues to be built and factories continue to churn out cheap, mass-produced goods, the growing middle class will become a burgeoning consumer class that will need to eat, sleep and be clothed. There is no shortage of housing in China as the infamous “ghost cities” have shown. Tons of cement have been poured into holes in the ground dug out of previously uninhabitable spaces to produce brand new cities, some of which – like Tianducheng – have replicated Paris complete with a replica of the Eiffel Tower and the Champs Elysees. Tianducheng, which is supposed to be a luxury real estate development housing 10,000 people is located in Hangzhou and remains largely uninhabited to date. The Australian journalist Adrian Brown visited one of the biggest ghost cities Ordos, and wrote this in a blog:

“Arriving in the city, I am struck by the similarity with North Korea’s capital, Pyongyang. Wide, empty boulevards. Grandiose architecture with confused themes. And an eerie shortage of people. At times you have to pinch yourself and say, “Yes, it’s real.”

Brown reports that vast new cities of apartments and shops are being built across China at a rate of ten a year, but they remain almost completely uninhabited ghost towns.

It’s all part of the government’s efforts to keep the economy booming. 64 million apartments are said to be empty across the country. But the Chinese government will probably argue that with current birth rates of about 2054 babies an hour (compare that to 450 babies born per hour in the US) the cities will get filled – eventually.

But what should cause Africa to worry? The growing Chinese middle class and newly born population have no housing problem in the short term but will definitely need to be fed. China currently consumes 37.2% of the total world’s eggs, 15.6% of the world’s chickens and 9.6% of cattle – for now. What will their consumption be in the next 20 years? The fact is that a significant number of the world’s population will be living in cities in the next 20 years. The next frontier of war will not be ideology (capitalism vs communism) or religion (fundamentalist Islam vs the rest of the world) but a fight for scarce resources such as water and arable land for food production. Africa is not far behind in that urbanization trend. By 2015 it is expected that 500 million Africans will live in urban centres and by 2025, 45% of Africans will live be urbanized. Africa’s towns will grow and demand for urban space will mean that adjacent traditional food basket areas will be converted into housing as we are already seeing in Kiambu and Thika here in Kenya. 50 million hectares of arable land in Africa – which is twice the size of the United Kingdom land mass – has been acquired in Africa for external food production by a number of countries including China, Qatar, Libya and Kuwait. China has only 9% of the world’s arable land feeding 22% of the world’s population. China also has only 6% of the world’s water resources at a time when projections show that by 2025, 36 countries and 1.4 billion people will face freshwater scarcity.

What is the point of throwing out all these seemingly irrelevant numbers? We natives are getting so excited about discovering coal, oil and natural gas, so much that we are foam at the mouth at the thought of what money we can make along the mineral extraction chain. But that’s the problem with us natives, we get distracted by our infatuation with our turn to eat, and may future generations be damned if we eat them out of existence.

Our worry as Africans should not be the obvious minerals that we stare in the face. It should be what we have of in plenty, but fail to recognize as the true ultimate prize: land and water. The Turkana aquifer discovery that reportedly holds 250 billion cubic meters of water or 70 years supply at current consumption rates received muted press attention a few months ago is but one of many pots of gold at the end of the Chinese rainbow. They will come and take our land and our water and give us roads and bridges in exchange while we close our eyes in supplications of gratitude. But who can eat or drink a road? A newly colonized native like me I guess.

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A journalist friend of mine recently drew my attention to presentations made at a conference hosted by the Financial Transparency Coalition held last week in Dar-es-Salaam, Tanzania. Mr. Zitto Kabwe, a member of parliament in Tanzania’s parliament and the chairman of the Parliamentary Public Accounts Committee, made a key presentation highlighting the role of parliaments in curbing illicit money transfers. His presentation, as any good presentation is meant to do, initially started with startling numbers that would capture one’s attention. Quoting an African Development Bank report, between 1980 and 2009 African economies lost between $597 billion and $1.4 trillion in resource transfers out of the continent. He proceeded to highlight that $597 billion left Africa illicitly in the form of bribes, kickbacks, theft, tax evasion and avoidance while only $80 billion flowed into Africa in the form of foreign direct investment and aid.

The thrust of Mr. Kabwe’s presentation was that multinationals are creating value in Africa but extracting that value through nefarious schemes such as transfer pricing and use of tax havens, particularly Mauritius, to move profits out of the source countries. Mr. Kabwe also draws attention to the fact that of the top 10 taxpayers in Tanzania, 7 use tax havens, begging the question: what then could be the problem if they are still making it to the top 10 list of tax payers? He also cited in his presentation that the three largest mobile companies are all listed in tax havens and names Airtel as being registered in the tax haven of Holland (I wasn’t aware Holland was a tax haven), Tigo registered in the tax haven of Luxembourg and leaves a question mark next to the name of Vodacom, perhaps suggesting he couldn’t find where this multinational was incorporated.

It would have been great if the honorable MP had taken time to note that it is the parent companies that are registered overseas and that the local companies, which are subsidiaries, are very likely to be locally incorporated which is why they are paying taxes locally to the point where they feature as top tax payers. But that is not the point of today’s piece. One cannot sensationalize the fact that multinationals are coming into your African country, making money, using all manner of tax avoidance schemes to get money out of the country and then state in the same breath that African countries have sent out billions in the form of kickbacks, bribes and theft from government coffers.

Multinational companies are organizations that have shareholders who have invested their capital with a view to getting a maximum return therefrom. They are not charitable organizations that are looking to give away money to whoever crosses their path. They are responsible institutions that are keen to employ locals, improve the lives of the communities and (hopefully) preserve the environments in which they operate. Knowing full well that a lot of government funds find their way into very deep unofficial pockets rather than used in the development of infrastructure, health and education as they are supposed be, it is not in any company’s interest to throw money over an unaccountable cliff. Especially where that money will simply be invested in personal assets of government officials in the very jurisdictions that these companies are registered anyway. Come to think of it, perhaps these multinational culprits are doing our African economies a favor by taking the money to other jurisdictions that will use the funds to improve the lot of their citizens by providing good infrastructure, health and education. At least someone gets to benefit, right?

Mr. Kabwe’s sense of drama doesn’t end with the numbers. His presentation makes a tongue in cheek allegation that even the government of Tanzania is guilty of tax avoidance and cites a Tanzanian government owned company “Tangold” as having been registered in the tax haven of Mauritius in 2006. I did a quick google search of Tangold and only came up with a high quality pastry company in Australia with that name. I did a further google search of Tanzanian gold mining companies and came up with a whole list of companies, none of which claimed to have any ties to the government of Tanzania. This company, which the government registered in Mauritius, is so below the radar that even the internet can’t find it. I did come away with the knowledge that curious allegations of sinister public and private sector motives are not only aggressively done by Kenyan MPs. They have soul brothers across the border.

Look, as long as our African governments continue to be massively inefficient in their management of public expenditure and increasingly corrupt in the use of tax payer revenue, well meaning companies will continue to find all manner of legal accounting loopholes to avoid financing personal accounts of corrupt officials. Our African members of parliament and people representatives are better suited to asking themselves what in heaven’s name is wrong with our governments. Why can’t we plug the leaks that allow money to filter out of our economies into personal overseas accounts? Or is our collective native Negro DNA utterly and completely incapable of resisting the urge to dip our fingers into the cookie jar? Perhaps anthropologists will find the solution to this quandary as it certainly has beaten everyone else. In Kenya, we dare not even say that it has become institutionalized over the years since independence if the less than 3-year-old judiciary shenanigans are anything to go by. This thing called corruption is characterized as a genome in our biological make up. We can’t get rid of it any easier than we can bleach our skins white. I say let the money stay offshore, at least we know $597 billion of it is put to some good use.

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“If bankers can count, how come they have eight windows and only two tellers?” Anonymous

The Independent Commission on Banking was established in the United Kingdom in June 2010 following the global financial crisis of 2007. Its mandate was to consider structural and non-structural reforms to the UK banking sector to promote financial stability and competition. The Commission, chaired by Sir John Vickers, produced a series of recommendations in September 2011, which recommendations have formed the basis of some legislation introduced by the government thereafter.

One of the key recommendations was aimed at improving the competitive landscape of British banking by making it easier for customers to switch banks. The Commission found that people only changed banks on average once every 26 years. What makes it difficult for you to move your current account facilities at your current banking provider? You probably have on average about five standing orders or direct debits on your account paying school fees installments, car loans, rent, life insurance policies, DSTV subscriptions, your phone bill and many other regular payments in the daily grind of life. The very idea of filling out forms to move all these payments to another banking provider is mind numbing at best and positively horrifying at worst. The nightmare that the forms will not be acted upon on time, payments missed, Credit Reference Bureau notified and all the nasty correspondence that will follow essentially keeps many of us “trapped” by our current banking providers.

Back in the UK, Sir John Vicker’s commission realized that by making switching bank accounts easier, the competitive landscape of banks would change as banks would have to improve their customer service due to the ease of customer attrition. Essentially bank accounts would have the same kind of portability that the mobile phone industry enjoys in number portability. According to an August 2013 online BBC article titled “Bank account switching service to launch in September,” only about 2 million people or 2.5% of the UK’s total banked switched accounts. The UK banking sector is controlled by four banks, which in total have 75% of all current accounts. Lloyds Banking group has a 28% market share, followed by Barclays at 14%, Royal Bank of Scotland at 13% and HSBC at 12%.

The UK government is keen to see a greater diversity in the concentration of current accounts but apparently has not publicly indicated what targets it has set. The BBC article seems to suggest that the government is keen to see people move away from the big banks and into smaller financial institutions to stimulate the competitive landscape.

The switching system is relatively simple according to the BBC article. Account holders contact their new bank who will do all of the switching for them. A website simplerworld.co.uk allows account holders to select a new provider from a list of banks that are participating in the switching system. The new provider arranges for all direct debits and standing orders to be redirected to the new account. Salary payments from employers will also be redirected. The “Switch in a Week” guarantee was launched on September 16th 2013.

Two banks are already offering incentives to new account holders to switch. First Direct offers £125 (Kshs 17,500) to new joiners while Halifax offers £100 (Kshs 14000).

It is noteworthy that First Direct is offering a financial incentive to joiners when it has consistently topped the list of best banks for customer service in the UK. According to a Daily Telegraph article dated 21st August 2013, the consumer website Moneysavingexpert.com asked 8,000 people to help rank banks’ customer service. First Direct scored 93% of respondents scored First Direct’s customer service as “great” while all the big four banks described above rated below 50% on the “great” score. Pundits are in a ‘wait and see’ mode as to whether current account holders will make mass movements to other providers based on the one week switching guarantee.

Over on this side of the pond, our industry would similarly only move to a switching mechanism were it enforced or required by Central Bank and definitely not of their own volition. The fact is that we all initially choose a provider based on some emotional or practical reason to begin with. Either our employer banked there and it was faster to get our salary payment at the end of the month or the bank’s sales and marketing pitch played to our emotions when we were looking for a place to open an account. Or the plain and simple truth: the bank we have our account in is the one that gave us an unsecured loan, overdraft or mortgage and we are joint at the hip till (our) death do we part. Whatever the reason, the vast majority of us are trapped. It is simply too much of an effort to move and our ratings are probably close to the UK numbers of one move per 26 years!

Our numbers are also remarkably similar to the UK in terms of market share. According to the Central Bank of Kenya 2012 Annual Banking Supervision Report, there were a total of 15.8 million banking accounts in Kenya. Four banks held 74% of these accounts namely Equity Bank with 7 million, Co-Operative Bank with 2.3 million, KCB with 1.2 million and Barclays with 1.1 million.

It is therefore interesting that deposit accounts are concentrated with four banks in a market that has 43 banks. Especially noteworthy is that the shift in market share has only occurred in the last ten years. The question to ponder though is whether a switching rule would be a game changer to the Kenyan banking industry’s market share dynamics. Customers themselves and their levels of satisfaction in the chosen high concentration banks can only answer this question. Sadly, we do not have independent, credible and published customer satisfaction data that would reveal this critical information. The Central Bank of Kenya will hopefully take such a crucial initiative some time this century.

[email protected]
Twitter: @carolmusyoka

Customers hire your product to do a job. That is the summary of an excellent Harvard Business Review article titled Marketing Malpractice by Clayton Christensen, Scott Cook and Taddy Hall. The article turns usual marketing and product innovation assumptions on their head by asking why after 30,000 new consumer products hit store shelves each year, 90% of them fail. Manufacturers and service providers go to great expense to undertake customer research on tastes, preferences and trends and yet they still don’t get it right if the product failure rates are anything to go by. The fact is that most customers purchase a product or service to get a job done, which job might not be that apparent in some instances to the creators of the product. Take this example that the writers found: a fast food restaurant wanted to improve milk shake sales. A researcher watched customers buying shakes, noting that rushed customers purchased 40% of the milkshakes early in the morning and carried them out to their cars. Interviews revealed that most customers bought shakes to do a similar job: to make their morning commute more interesting, stave off hunger pangs until lunchtime and give them something that they could consume cleanly with one hand as they were driving. Understanding this job inspired several product improvement ideas. One such idea was moving the milk shake dispensing machine to the front of the counter and sell customers a prepaid swipe card so that they could dispense the milkshakes themselves and avoid the slow drive through lane.

Thus, by observing and interviewing people as they are using products, you can identify the jobs they want to get done. Procter and Gamble, the manufacturers of globally recognized brands such as Ariel, Gillette, Oral B and Vicks have internalized customer observation as a key driver for product development. P&G executives are actively required to visit supermarkets and homes whenever they travel in order to observe customer preferences and utilization of domestic products at their point of use. It is only by actively being in the consumer’s world can the company continue to drive innovation and a close connection to understanding what job their products are hired to do.

Another great example of consumer observation inspired innovation was the founder of Sony, Akio Morita. Morita was known for not believing in consumer research and asserted that Sony shouldn’t ask people what they want because they don’t know what they want – quite similar to Apple’s Steve Jobs ethos. Having observed what people were trying to get done in their lives, he then tried to see whether Sony’s electronics miniaturization technology could help them do these things better, easier and cheaper. Thus instead of trying to augment the traditional tape player into one with more features or a cheaper version, Sony developed the portable tape player, the Walkman, to allow people to carry and listen to their music everywhere they went. The Walkman was designed and launched as a fashionable device because Morita predicated the rise of a “headphone culture.” Said Morita at the February 1979 launch: “This is the product that will satisfy those young people who want to listen to music all day. They’ll take it everywhere with them, and they won’t care about record functions. If we put a playback-only headphone stereo like this on the market, it’ll be a hit.”

Closer home, the augmentation of the Mpesa product with Mshwari serves as a classic example of a product that customers hire to get a job done. When Safaricom launched the Mpesa money transfer service it had multiple purposes. Firstly to enable movement of money across the country at a far lower cost with greater convenience than the existing money transfer services at the time. However as the product continued to gain rapid acceptance, it became apparent that subscribers were not only using the service for moving money across, but were also using it as a repository of funds. And, get this, they were happy for those funds to sit idle in their mpesa accounts without generating any return in the form of interest. Which would then typically generate an internal corporate question: what are our customers hiring our mpesa product to do? Transfer money or keep money in a 24-hour access, cheap and extremely safe environment?

That mpesa had morphed into a “bank” of sorts was quite likely an unintended consequence of a product that was created to serve a completely different purpose. Thus partnering with a bank to create the banking service that subscribers were seeking was a natural progression that quite obviously arose after observing consumer behavior. Having said that, the mshwari loan product that was initially marketed as a way to help the small scale entrepreneur to borrow for business growth has found greater use from the mobile phone subscriber who needs a short term loan to sort an emergency requiring small amounts of cash that they currently do not have in their physical wallets. Hence the product advertising that pushed mshwari as an entrepreneur’s answer to sources of debt may need to be enhanced as the product serves more than that purpose. As the HBR Marketing Malpractice article states, a good purpose brand can be sustained by linking your product to the job it serves through advertising. The writers assert that savvy ads can even help consumers identify needs that they were not consciously aware of before. The example given is that of Unilver’s Asian operations which designed a microwavable soup tailored to the job of helping office workers to boost their energy and productivity in the late afternoon. Called Soupy Snax, the product generated mediocre results. However when Unilever renamed it Soupy Snax – 4:00 and created ads showing lethargic workers perking up after using the product, ad viewers remarked, “That’s what happens to me at 4:00!” Soupy Snax sales apparently soared thereafter.

Observe your customers as they use your products rather than assuming your product serves their needs. You might be surprised at the results.

[email protected]
Twitter @carolmusyoka

A little bird was flying south for the winter. It was so cold that the bird froze and fell to the ground in a large field. While it was lying there, a cow came by and dropped some dung on it. As the frozen bird lay there in the pile of cow dung, it began to realize how warm it was. The dung was actually thawing him out! He lay there all warm and happy, and soon began to sing for joy. A passing cat heard the bird singing and came to investigate. Following the sound, the cat discovered the bird under the pile of cow dung, and promptly dug him out. Then he ate him! Management Lessons: 1) Not everyone who drops dung on you is your enemy. 2) Not everyone who gets you out of dung is your friend. 3) And when you’re in deep dung, keep your mouth shut!

The Jubilee coalition government has had a fair amount of management tests thrown at it over the last four months of its young administration. There have been tests in labor relations generated by strikes and potential strikes from teachers and government medical staff. There have been tests in disaster preparedness and business continuity plans in the Jomo Kenyatta International Airport (JKIA) fire last week. There have been tests in remuneration packages and benefits thrown in by members of parliament and governors. There have been tests in resource mobilization with the extensive debate over the VAT bill and what falls within the ambit of increased cost of living versus critical revenue generation for a government heaving under the burden of a horrendous recurrent expenditure budget. This has definitely been a classic case study of management 101 at its very best.

Of course we are all watching and waiting to see what the results of these tests will be. We are vested parties and interested stakeholders as the Jubilee coalition is managing the business of Kenya, of which we are all shareholders. Whatever decisions they make will definitely impact some or all shareholders positively or negatively. However what is interesting to observe from shareholders (read Kenyans on social media) was the reaction to the President’s visit to the scene of the fire early Wednesday morning. There were two extreme views on this action with one side waxing lyrical about the folly of such a visit as it would only interfere with the recovery operations and the other side saying that it was necessary to show support to the recovery teams. I read one post on Facebook which captured my sentiments completely: “Poor Uhuru, damned if he does and damned if he doesn’t.”

Folks, Uhuru is the CEO of Business Kenya. As any other CEO would do, he turned up at the scene of a massive disaster that would have ramifications on several aspects of the economy. As we are a month into one of the largest tourism attractions – the wildebeest migration – the airport is the focal point for the arrival and departure of a critical resource of foreign currency in this country: tourists. The airport is also the primary focal point for a second critical foreign exchange earner which is horticulture. Tons of flowers and vegetables which had to be shipped out could not move as airport operations ground to a halt. As flowers and vegetables are time sensitive, the whole value chain also ground to a halt as harvesting at the flower and vegetable farms has had to be reduced and in some instances terminated to prevent spoilage of produce as it awaits shipment at the cargo terminal. As one of three key regional hubs in Africa (Addis and Johannesburg being the other two) intra-African travel for traders and businessmen was unceremoniously brought to a standstill putting thousands if not millions of dollars at risk beyond the borders of just Kenya as they could not travel to or from their destinations which required transit through Kenya.

The President’s visit to the scene of a national and regional disaster is what any shareholder would expect their CEO to do. A CEO is supposed to take charge, get completely immersed in the details of the disaster and lead from the front in finding ways in which the business must continue. His presence gives assurance to customers (in this case passengers and exporters of all extractions) that the business is taking the disaster extremely seriously and it is receiving attention from the highest office. That his cabinet secretaries for transport and interior followed in quick succession with active participation in the business continuity process demonstrated the seniority levels being accorded to getting the disaster contained.

This was not a public relations exercise that social media analysts were inferring was in the making. This was management at work. That is how businesses are run. Dung drops, nay, rains from a hellish event and management are supposed to clean it up. In this case, coordinating the dung clean up will take a herculean effort of both people and ego management as well as rising above the very typical finger pointing that is going to result once the smoldering fires have subsided. It is because of this very likely scenario of internal bickering that a CEO has to stamp his authority and establish a presence that demands expeditious solutions rather than it-wasn’t-me-it-was-you time wasting discussions.

The government through @interiorKE, the Kenya Airports Authority through @kenyaairports and Kenya Airways through @kenyaairways have done an excellent job on Twitter in keeping the public informed of what’s going on in restoring normal services through the vital travel artery that is JKIA. Fact is they are all in deep dung. However, it’s our turn to keep our mouths shut and let them work!

[email protected]
Twitter: @carolmusyoka

A student comes back to the dorm and finds his roommate near tears. “What’s the matter pal?” he asked.
His roommate says, “I wrote home for my parents to send money so that I could buy a laptop.”
“So I guess they said no?” the student asked.
“No, they sent me the laptop,” the roommate moaned.

A friend recently drew my attention to an interesting article posted online on Reuters last week titled “A loan pool to help clients help family float school bills”. The article, authored by Jennifer Hoyt Cummings reports about a growing trend where families pool funds together which funds are used to loan money to family members going to university. Cummings writes that under a loan pool, a family sets up a trust and bequests an initial sum into it. They then establish rules for how family members qualify for the loans, how long they have to pay them back and what happens if they default.
The family appoints one or more trustees who review the applications to determine who should get the loan. Later in life, those who benefited from the loan pool can contribute. The context under which this article was drawn to my attention was via the question: Can this work in Kenya?
To begin with, we have a well-entrenched culture of coming together to assist family and friends with hospital bills, higher education fees and funeral expenses. It is not entirely alien to us to often get together in the form of savings and credit co-operatives (SACCOS) within our respective professional fields to pool funds and lend to ourselves when in need. It is also fairly common to group together as friends and/or family and form chamas (on the smaller informal scale) or investment companies (on the more formal scale) to pool funds to invest in property as well as public or private equities. So concepts of coming together for financial purposes are pretty much part of the Kenyan DNA.
But whether we undertake these tasks with reasonable success is where the rubber meets the road. Over the last 3 years I have had occasion to work with several investment groups and chamas that are looking to venture out of the analysis paralysis morass that permeates a large number of them. Quite often I have found that a number of these groups for lack of innovation, energy or sheer determination have failed to make any investments despite years of contribution. More often than not, a number of them default to lending to each other at a premium rate, but lower than the commercial banking rate so that the contributed funds do not remain idle. Very few succeed with this strategy as there is always the presumption by some borrowers that “these are my friends, I can delay repayments….or I can simply default and there’s not much they can do.” Quite a number of the chamas that I have met who adopt this strategy rarely succeed or remain united. The question I always pose is: Are you an investment group or a SACCO? If you are the former, you came together to pool funds and invest in diversified sectors of the economy to generate a return from capital appreciation as well as income resulting from that capital which is deployed. If you are the latter, then you came together to lend, pray that your money is repaid, and continue that mode of prayer for the rest of the chama’s shaky existence.
With that in mind, setting up a loan pool amongst family members would be extremely beneficial on two counts. Firstly, it can be an excellent way to stop salivating for a parent to die and distribute their estate to their children. A parent would liquidate his assets during his lifetime, set up a trust and specifically legislate that the beneficiaries would be family members who apply for the funds to further their education. Trustees could be family members and trusted friends or advisers who have been given clear parameters for loan qualifications. The obvious reward is that the person setting up the trust would know that his funds will not be squandered on the “good life” and will be used (if well managed) for future generations of his or her bloodline. Secondly, family members could initially pool a certain amount of initial funds. Any child needing financial assistance for higher education would apply formally, making a good case for why they should receive the loan and committing to concluding their college degree. This commitment would now be not only to their parents, but also to the wider family network bringing greater responsibility to bear on the loan applicant. Loan repayment can be set to be undertaken either by the applicant’s parents or by the applicant themselves upon completion of their education.
The benefits are obvious: generations of children get educated which is one of the greatest gifts we can give. The dangers are equally obvious: if the system is abused through deliberate loan defaults, the wider family unit can unravel and a bitter family feud ensues. Absolutely critical for success is a clear charter or trust deed that spells out the purpose for which the funds are being set aside, namely: “family member ONLY college education” as well as the parameters for loan qualifications, including: “degree or diploma from a Commission for Higher Education recognized institution ONLY”. Strong deterrents against defaults not occasioned by force majeure (such as job loss or illness) should be put in place to ensure that family members do not take the facility for granted. Consequences for loan default would need to be painful and rely on social peer pressure. Cummings’ article suggests a very simple solution in one particular family’s pool. The trustee would send a quarterly update to all family members detailing the status of the loans. The shame factor would ensure compliance to the loan terms. So yes, I do believe the concept of loan pools would quite easily be adopted in Kenya.
[email protected]
Twitter: @carolmusyoka

Phew! It has been three months since I was sworn in as President, sorry, Governor of my county. To say that it has been a walk in the park would be to tell an outright lie. It has been hell. Hell on earth. I have looked the devil in the eye more times than I care to remember in the last 90 days and he often makes me ask myself why the heck I chose to run for this office. Oh, I remember. It’s because I am the President, sorry, Governor of MY county. The problem is that there are too many buffoons out there who are seized of matters that should not be of their concern regarding MY office. In fact, writing this diary is very cathartic and it helps me to say what I really would like to say to everyone but I am constrained from doing as it may be career limiting. These are my top five irritants so far:

1. It’s Evolution not Devolution!
The new constitution envisages that power will now emanate from the bowels of this beautiful country and not from the wolfish, self-centered, self-absorbed, horrendously bureaucratic central government. A new system of county governments is required to evolve with immediate effect. The dictionary defines to evolve as: “To develop gradually, from a simple to a more complex form.” Yes, this is my role, to gradually develop MY government from a simple paper pusher to a more complex, well-defined centre of power that drives the entire economic engine of MY County. (I’m getting giddy with excitement as I write this, let me pause and take a sip of something strong.) Maybe I should rename the County Headquarters as “Evolution Centre”. Hmmm, that has a nice ring to it.
2. It’s the wrapping not trappings!
Look. I am the President, sorry, Governor of my county. I don’t know what all the brouhaha is about regarding my request to fly the flag on my car or to have a diplomatic passport or to have a Governor’s mansion. The media and all those civil society meddlers say that I am getting carried away with the trappings of power. Puh-leeze! Since when did you see a gift that was not wrapped? I am a gift to the people of this county, as I will apply my God given intellect to improving their welfare! A four wheel drive car, a mansion to entertain potential investors and other VIPs, a diplomatic passport to visit all ends of this earth and a flag to signify the importance of the person overlapping traffic and parking wherever I want is simply the wrapping around the magnificent gift of the Governor. Ala!
3. I can fidget with my budget!
I went to school, so I can read. And I have read Section 174 of the constitution which clearly states that amongst the objects of the devolution of government are subsection (g) to ensure equitable sharing of national and local resources throughout Kenya. How better can I ensure that our share of the national cake is shared equitably than through my county budget? If I want to set an entertainment budget of Kshs 53 million, I can! After all, it will be shared with the local hotels, bars and entertainment spots thus ensuring that the employees of those institutions continue to get gainful employment from my patronage of their services. Allocating millions to the acquisition of cars for county executives will ensure that the local petrol station owners and local tyre dealers will see greater sales which add to the bottom line, and continue employing local people who will essentially be getting a share of the county resources. Right? If the media that keeps complaining can’t see that then they need to get stronger eyeglasses or move to my county and open petrol stations. As for the meddling Controller of Budget, she needs to understand the Constitution’s S. 174 (d) which clearly states that one of the objects of devolution is to recognize the right of communities to manage their own affairs. I am perfectly capable of managing my own affairs without someone breathing down my neck.

4. Hire or face the fire
Seriously, these Transitional Authority chaps have got to be kidding me. How in heaven’s name am I supposed to “absorb” employees of the central government who will lose their jobs when functions are devolved to the counties? I am not a sponge! I owe so many favors to so many people who worked on and financed my campaign that I need to find jobs for their innumerable relatives. My county offices need accountants, clerks, secretaries, administrators etcetera etcetera and I already know who is going to get what. The last thing I need is to be told that my wage bill is to high to sustain so cuts are needed on my entertainment or fuel allowance. I need to get these people in quickly to the offices so that I can tell those Transitional Authority chaps, with as straight a face as I can muster, that sorry: my house is full.
5. Kusema na Ku-tender
I have only 4 years and 9 months to get cracking on this job. I’ve managed to keep my senator happy with the promise of a few tenders to supply office stationery for his wife’s business. If I keep him happy, then he will keep fighting for a bigger say in the affairs of county budgetary allocations. The bigger the county allocation we get, the more room there is for purchasing goods and services. Then I will really be kingpin around these sides as businessmen trip over themselves to become key suppliers, which is why I need a large mansion and entertainment budget to entertain these “investors”. Actually come to think of it, building a mansion has quite a number of tenders associated with it, right? Which is what my campaign promise was all about, “Kusema na Ku-tender, sorry, Kutenda!

[email protected]
Twitter: @carolmusyoka

“Culture eats strategy for breakfast.” Those wise words ring very true for many organizations today and were quoted by the famous management thought leader Peter Drucker. Across industries you have many organizations that do manufacture exactly the same products or sell exactly the same services. The key difference between the industry leaders and the laggards is usually one: organizational culture. Most cultural aspects and differentiators are tangible and can be gleaned from signs and symbols such as how people dress, use of first names when addressing seniors or whether there are separate facilities for seniors and juniors such as bathrooms, cafeterias and parking. Whatever the case, if an organizational culture does not reflect the foundations of strong values which rest on the core of a strong purpose, then even the sexiest corporate strategy will fail to launch on the basis of incongruence. The management tries to pull in one strategic direction but fails to recognize that the organizational culture does not allow it to pull itself out of the morass that keeps it stuck in the quagmire of reality. A 2011 study titled “Why Culture is Key” by a leading consulting company Booz and Company concluded, “Culture matters, enormously. Studies have shown again and again that there may be no more critical source of business success or failure than a company’s culture – it trumps strategy and leadership. That isn’t to say strategy doesn’t matter, but rather that the particular strategy a company employs will succeed only if it is supported by the appropriate cultural attributes.”

Herewith are a few examples of (very typical) organizational culture.

Exhibit One: “Are you lonely? Don’t like working on your own? Hate making decisions? Then call a meeting. You can see people, draw flowcharts, feel important and impress your colleagues……all on company time! Meetings: the practical alternative to work. “ While I saw this on a poster that was making fun of an office meeting culture, it rings especially true in many organizations where people have meetings for the sake of meeting. It eats up valuable work time, expends useless energy where one is not required to be at the meeting and often times leaves meeting attendees feeling frustrated and angry where discussions centre around the same thing over and over again with no tangible conclusions. But the motive behind calling a meeting can often be an excuse to wield power: the power to summon, to dominate and to control a “subject’s” time. I recently met a group of executives one of whom gave the horrific example of a meeting called by her boss. The boss, who was in a glass enclosed office, decided to dial into the meeting via Skype as he was too busy to leave his desk which was 10 meters away from the conference room where the meeting was taking place. The effect was immediate: meeting attendees felt demeaned that their time was clearly not as important as that of their boss and were outraged that the company’s value of respect for others was being violated by a senior executive. Meetings are a necessary management tool to deliver organizational goals but the danger that they can derail employees away from the quite obvious goal of getting things done should never be forgotten.

Exhibit Two: “That’s the way things are done around here.” You’ve probably heard someone in the organization, yourself included, say this when asked why a certain process or policy exists in the company. You are just too lazy to find out why it exists and how it may be a stumbling block for the development of a better product or faster service delivery. A good example of the dinosaur approach was experienced by Stephen Elop, who took over as CEO of Nokia – the mobile company giant in decline- in September 2010. One of Elop’s challenges was to change old habits among employees. In a talk to employees, he asked a question that many were probably too afraid to answer truthfully give how Nokia was struggling to combat new entrants Apple and android powered phones into mobile telephony. When Elop asked how many people amongst the employees used an iPhone or Android device, a few hands went up. Elop’s response was, “That upsets me, not because some of you are using iPhones, but because only a small number of people are using iPhones. I’d rather people have the intellectual curiousity to understand what we are up against.” In other words what Elop found was a very inward looking culture existing at Nokia, one born of hubris that the company would always be successful and didn’t need to worry about other players hitting them from left field. Which is exactly what happened. The danger of this culture is that an industry leader such as Nokia can quickly turn into an industry laggard that starts to adopt copycat tactics rather than innovation to stay afloat.

Exhibit Three: “Rules are for dummies and subordinates, in that order.” Charles Revson , the founder of the Revlon beauty products empire, was a typical highhanded boss. He worried that employees were not coming to work on time, although he himself rarely appeared in the office before 12 noon. One day he walked into the new Revlon headquarters and asked the receptionist for the sign in sheet, which absolutely every employee had to sign upon entry. The receptionist who was new responded, “I’m sorry sir you can’t do that.” Charles said, “Yes I can.” The receptionist replied, “I’m sorry you can’t. I have strict instructions that no one is to remove the list, you will have to put it back.” They went back and forth, with the receptionist remaining firm but polite. Finally Charles said, “Do you know who I am?” to which the reply was, “No sir I don’t.” “Well when you pick up your final paycheck this afternoon, tell ‘em to tell ya.” Well, that story sums up that culture quite well: Do as I say and not as I do. Capisce?

[email protected]
Twitter: @carolmusyoka

Dear Inspector General Kimaiyo and Chief Justice Mutunga:

This is an open business proposal to both of you from an infrequent user of your services. The reason for my infrequence is that I try, at all times, to be a law abiding citizen failure to which I would have to be a guest of the state in the swanky accommodation that your offices provide. You see, I was once a guest at the impeccably furnished, luxurious and well appointed jail cells of Makadara law courts and the unforgettable experience led me to believe that collaboration between the two of you would lead to consistent revenue generation, significant profit and streamlined cash flows without getting law abiding citizens such as myself partaking of your accommodation.

I had committed what, in my view, was a minor traffic infraction. As I have written here before, way before you were appointed to your good offices, the traffic offence occurred at the Jomo Kenyatta International Airport parking when an overzealous traffic officer accused me of obstruction as I had parked a vehicle not in between the two lines that marked the parking, rather on top of one line meaning that it occupied the space of two vehicles thereby causing an “obstruction’. The offence was committed at night, with no lights in the parking lot that enabled me to see the parking lines of the only available parking slot at that busy hour. Woe betide the driver of a vehicle who does not keep a look out for faint parking markers on the tarmac of the JKIA parking lots as the hawk eyed traffic policemen who have infrared night vision goggles sewn into their corneas will remind them of their misdemeanors. I paid a cash bail of Kshs 5,000 which was in a variety of notes and coins following a very harried and impromptu harambee by the mortified occupants of the offending motor vehicle that I was driving. The money was carefully wrapped in a yellowing page torn off an old note pad and bound together with a rubber band at some little office in the upper levels of the arrivals terminal.

When I eventually attended my court case (Republic vs. Carol Musyoka sometime in 2006 in case you decide to look for the file at Makadara Law Courts) I pleaded guilty to the offence through gritted teeth, as advised by legal counsel in order for the ignominious experience to come to a rapid conclusion. But it didn’t end there. I had to be thrown into the luxurious presidential suite at the Makadara cells while my spouse began the harrowing task of executing a speedy release which meant “facilitating” the court clerk to release the file, going upstairs to the cashier and “facilitating” the payment of the fine – the amount of Kshs 5,000 that was exactly the same as the cash bail– and then he had to wait to be refunded my cash bail. The cash bail was given to him in, you guessed it, the wrapped up, rubber band bound yellowing page bundle that had been deposited at JKIA. Thereafter I checked out of my very crowded mixed gender suite quite reluctantly, two hours after I had pleaded guilty through gritted teeth, into the warm sunshine and clean air of the Makadara suburb.

With that background in mind, herewith is the business proposal. Revenue: Convert all traffic cash bails into instant fines. That’s really not rocket science; it’s a matter of semantics seeing as the amounts are exactly the same. It moves from being revenue of the Judiciary (traffic fine) to revenue of the police force (cash bail converted into fine). And before the Judiciary gives the sob story that all traffic fines collections have to be remitted to the state, this would be a good time to say that the annual police budget from the government can take these funds into account and the budget be reduced to the extent of the anticipated collections for each financial year. Now to the profits I hinted at. The number of traffic offences at the law courts take up valuable court time that could be better applied towards listening to more substantive legal cases. Listening to more cases means faster dispensation of justice. Faster dispensation of justice means more people will go to court to seek justice in civil cases leading to higher court fees and wider legal jurisprudence in civil matters….you catch my drift. The profit extends to the mwananchi too. Here’s why. Assuming that I was paid the exact amount that a Kenyan member of parliament (who remains the best benchmark for the hardest working laborer in Kenya) is paid which is Kshs 532,000 a month, my daily labour rate would be Kshs 26,600 assuming 20 working days a month. This translates into Kshs 3,325 in an eight-hour working day. Seeing as I spent a good five hours at Makadara Law Courts, the sum total cost of my time was Kshs 16,625 which time and money could have been applied in a more productive sector of the economy. Now imagine that amount replicated hundredfold to account for all the traffic offenders having court cases that day. Insane, I know!

Finally, with regards to streamlining cash flows, it is really quite simple. Get the police officers to carry moneybags padlocked to their waists every morning as they leave their police station base. Ensure that the bags are empty going out and at a minimum, midway full when the police return at the end of their shift. You see with all the crazy traffic in our cities these days and even crazier drivers on national highways, there are bound to be at least 20 offenders on every policeman’s shift generating a minimum of Kshs 100,000 in Republic-vs-Carol- Musyoka-type traffic offences. That’s cash that can be used to fuel patrol vehicles, buy office stationery and pay salaries at each police station. You are most welcome to discuss these items at your next lunch meeting together.

[email protected]
Twitter: @carolmusyoka

Some of the world’s most notable inventions have been either accidental or created by inventors who have no history or knowledge of that industry. Here are a few illustrative examples.

Potato Crisps: In 1853, George Crum, a chef at an American restaurant, invented potato crisps as he was trying to make a plate of fried potatoes for a customer. The customer sent back his plate of potatoes many times and kept asking for them to be more fried and thinner. Crum lost his temper, sliced the potatoes ridiculously thin and fried them until they were as hard as a rock. To the chef’s surprise, the customer loved them and wanted more!

Penicillin: In 1928, Alexander Fleming was halfway through an experiment with bacteria and decided to go on vacation leaving a dirty petri dish in his laboratory sink. When he returned, he found that bacteria had grown all over the plate except in an area where mold had formed. That discovery led to penicillin.

Saccharin: Constantin Fahlberg, a scientist at John Hopkins University accidentally discovered the artificial sweetener in 1879. After spending the day studying coal tar derivatives, Fahlberg left his laboratory and went to dinner. Something he ate tasted particularly sweet, which he traced to a chemical compound that he had spilled on his hand earlier in the day. It also turned out to be calorie free. Being a cut-throat entrepreneur, he sliced his co-scientist and the University when he secretly patented the breakthrough discovery Saccharin.

Viagra: In 1992 scientists at the pharmaceutical giant Pfizer were working on a drug to treat angina, a coronary heart disease. While testing residents of a Welsh village, the drug had little success against the disease. However the men taking part in the study refused to give up their medicine at the end of the test period. The result was the drug Viagra that was marketed for an altogether different purpose.

Fireworks: During the Chinese Sung dynasty (960-1279) an unknown cook accidentally mixed together charcoal, sulfur and saltpeter which were common kitchen items 2000 years ago. When the mixture was compressed in a bamboo tube, it exploded. Legend doesn’t say whether the cook survived, but I assume he must since the recipe was used several times thereafter.

What do many of the above inventors have in common? Outstanding curiosity followed by remarkable success. And like serial entrepreneurs will attest, if you at first fail, try, try and try again. Tom Peters, the renowned American management guru reminds us that we should punish mediocre success and reward spectacular failure. If we dare, that is. But we dare not in most cases because we have cost-income ratios to manage, headcount limitations and a resounding aversion to spending time “experimenting” on “new fangled ideas” without tangible results.

An apt quote from the book ‘Funky Business Forever’ by Nordstrom and Ridderstrale captures the spirit of many businesses today. “The ‘surplus society’ has a surplus of similar companies employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality.”

Think about your industry today. Does your organization look exceedingly like that of your competitor? Would you refer to your competitor’s office as the same forest with different monkeys? Are people in the organization afraid to say “I don’t know” because that would be seen as a sign of weakness rather than an invitation to explore, test or scrutinize existing products or policies? Is your organization guilty of regularly raiding the competition to get new hires and periodically losing current employees to the competition? Which ethic, by the way, in and of itself creates the most insane and unhealthy doses of in breeding and tunnel based industry vision.

We draw great comfort from aligning ourselves to the industry we are in. We benchmark ourselves against our peers, happy to have gained acceptance as new entrants into a field of established performers. We sit at the table of men and sip from the cup of perceived prosperity. We become comfortable when our profit margins are maintained above or within the industry average and we do not want to rock the boat and take a different tack in providing customer driven solutions that may hurt our bottom line even if in the short term.

The financial services industry sits well within this school of thought. What was the last earth-shattering product you heard produced by the insurance industry? With 42 banks in the Kenyan market, not more than five have created absolutely new products that have DRAMATICALLY changed the lives of their customers. Which stock broking firm has stood head and shoulders above its peers as the market leader in customer service (forget the numerous industry award ceremonies which are nothing other than over inflated and underwhelming obtuse PR methods- now watch my name disappear from several invitation lists).

M-Pesa and its world acclaimed innovative success was created by a mobile phone company with not a banking cell in its DNA. László Bíró created the ballpoint pen a Hungarian journalist in 1931 with no history of working in the fountain pen industry. Does the DNA of our financial services industries lend itself to trailblazing innovation or to the unimaginative, boring, staid conveyor belt generation of products and services that the majority of the players expose us to? Is there extraordinary gumption that allows for product experimentation, spectacular crashes and institutionalized curiosity?

The Viagra of the financial industry can be found. That accidental experiment that fails to cure one problem but monumentally transforms a completely un-serviced customer need. But it requires brave executives, braver shareholders and most certainly, an internal non-traditional innovator whose voice must be allowed to be heard.

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Twitter:@carolmusyoka

Doctors have their knickers in a twist. The bee in their bonnet, apparently, is that a non-medical professional has been appointed to head the health ministry docket. Frankly speaking, I think it is much ado about nothing, a storm in a teacup really. The reason for using all the English idioms is to protect myself using a discourse of constructive semantics when I next go on my doctor’s visit and get challenged on today’s opinion. In other words, I’m covering my backside for the following attack: There is absolutely nothing wrong with a commercial banker heading the Ministry of Health. Capisce? Let me give you doctors some tidbits about organizations.

Number one: did you know that not a single university in this country (and most likely the world) offers a degree in banking? Yet the world is full of bankers. I worked in the banking industry for ten years and met people with a varied range of degrees from chemical engineering and actuarial science to agricultural economists and dental science. You will note, of course, that there were no rocket scientists. Why? Because banking is NOT rocket science. I [as well as those before and after me] learnt my banking on the job, almost like an articled apprenticeship. You picked the field you wanted to grow in [or you got thrown into the field through no choice of yours] be it operations, sales, credit and risk management, finance, or treasury and you learnt on the job. Years of doing the same job with ever growing scope of responsibility churns out seasoned bankers. The more senior you grew in the organization, the less your technical skills mattered as much as your leadership skills and ability to grasp the key components of across the banking sphere that would enable you to steer the ship to a profitable harbor, maintain regulatory compliance and motivate employees to deliver.

Number two: There are some CEOs of banks who have never even been to university but have steered their organizations through stable profit growth.

Number three: There have been CEOs of hospitals who have never been doctors but got the job done. There have also been CEOs of hospitals who were doctors and just simply didn’t get the job done.

Number four: The medicine [pun fully intended] for an organization that is guzzling money on the intake and churning out poor service, minimal drug distribution and massive corruption is a good dose of management. Not a clinical diagnosis of physical symptoms but an intellectual intervention that will staunch the massive bleeding of cash and drugs. The technical stuff, well, that’s what the Director of Medical Services and all those other civil servants within the Ministry are supposed to do. After all neither the captain of an airplane nor a ship can fix the vessel if the electronics or engine go kaput!

Number five: The great thing about putting in someone who doesn’t know the first thing about the first thing is that he will always say, “I don’t know, please tell me more about this.” In the process he will a) learn more b) interrogate why something has always been done in a certain way and c) go out of his way to learn more so that the “I don’t knows” become far less and the “Why don’t we do it this way” become more. It is also instructive that some organizations have seen the benefit of bringing in people from entirely different industries into management as they dilute the in-breeding culture that hiring from competition can create in terms of a complete cookie-cutter conventional way of thinking across a certain industry. One of my best hires when I was a banker was someone from the Fast Moving Consumer Goods (FMCG) industry. He didn’t have to be told that head office was a zone for checking into once a month and his time was better spent out in the trenches at branches motivating staff, meeting customers and solving problems at the distribution point. It was instinctual for him as that is what FMCG is all about, being on the ground, ensuring your distribution channels are performing swimmingly and minimizing time spent from production [of services such as transactions and loans] to consumption by bank customers.

Number six: The health ministry, like any organization, has a mandate to its customers, the citizens of Kenya. That mandate is to deliver health services within a certain policy framework. It is that policy framework that we must pay close attention to as well as to the persons who both draft it as well as execute it. Are they professionals? Do they know what they are talking about? Can they execute? Can they provide effective monitoring and evaluation? It’s very likely that the answer to all those questions is a resounding yes. They however do not need a doctor to make sure that they are doing their job well. They need a great orchestrator, a formidable choirmaster who can get all the voices to sing in different harmonies but generate a beautiful tune.

Number seven: Finally, health management, like banking is not rocket science. It is about input of management skills to manage financial and human resources that in turn generate an output of great service delivery to the health customers. Whether you’ve managed an airline, a manufacturing business or a not-for-profit organization you are fit and able to steer both people and finances to create a result. If in doubt, refer to point number one.

Execution is the art of getting things done. We need to turn our focus on keeping our government accountable for the effective use of our hard earned tax shillings. The fact that established managers with unassailable track records should give us great comfort that the right people are on the job. Their leadership skills will certainly be put to the test. I wish them well.

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Twitter: @carolmusyoka